Corporations Regulations 2001

Chapter 7—Financial services and markets

7.7.01 How documents, information and statements are to be given

(1) For subsection 940C(3) of the Act:

(a) if general advice is given orally in a public forum, information that subsection 941C(5) of the Act requires to be given must be given orally; and

(b) if general advice is given in electronic form in a public forum, information that subsection 941C(5) of the Act requires to be given must be given in electronic form; and

(c) if general advice is given in writing (otherwise than in electronic form) in a public forum, information that subsection 941C(5) of the Act requires to be given must be given in writing; and

(d) if general advice is given in any other manner in a public forum, information that subsection 941C(5) of the Act requires to be given must be given in the same manner.

(2) For paragraph 940C(7)(a) of the Act, a Financial Services Guide and a Statement of Advice may be given to a person in either of the following ways:

(a) making the Guide or Statement available to the person in any way that:

(i) is agreed to by the person; and

(ii) allows the regulated person to be satisfied, on reasonable grounds, that the person has received the Guide or Statement;

(b) making the Guide or Statement available to the person’s agent in any way that:

(i) is agreed to by the agent; and

(ii) allows the regulated person to be satisfied, on reasonable grounds, that the agent has received the Guide or Statement.

(3) For paragraph 940C(7)(b) of the Act, a document, information or statement that is to be given in electronic form must, as far as practicable, be presented in a way that will allow the person to whom it is given to keep a copy of it so that the person can have ready access to it in the future.

(4) A document or statement that is to be given in electronic form must be presented in a way that clearly identifies the information that is part of the document or statement.

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(i) there is no minimum period before which funds cannot be withdrawn or transferred from the facility without a reduction in the return generated for the depositor; or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;

(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

(i) provides general advice to the public, or a section of the public; and

(ii) is available in a place that is accessible to the public is prescribed.

Examples:

1 Television or radio broadcasts.

2 Distributing promotional material contained in newspapers and magazines.

3 Sending a broadcast via an Internet website or webcast.

4 Giving a public lecture or seminar for retail clients, including employees of a workplace.

Note: If general advice is given to the public, or a section of the public, the requirements of subsection 941C(5) of the Act must be complied with. Additionally, if general advice is provided to 1 or more retail clients, the providing entity must comply with section 949A of the Act.

(3) For subsection 941C(8) of the Act, a Financial Services Guide does not have to be given to a client in the following circumstances:

(a) a person (person 1) makes an inquiry by telephone in relation to the rental of a vehicle from another person (person 2);

(b) as a result of that inquiry, it becomes apparent to person 2 that a financial service will be, or is likely to be, provided to person 1;

(i) the accidental death of, or bodily injury to, a person caused by an accident in connection with the use of the rented vehicle during the rental period; and

(ii) the loss or destruction of, or damage to, either or both of baggage and personal effects belonging to a person in the rented vehicle caused by an insured event during the rental period;

(d) person 2 makes arrangements for a document that is the equivalent of a Financial Services Guide to be given to person 1 no later than the start of the use to which the insurance product relates.

Example: The commencement of a journey of the rental vehicle is a use to which the insurance product relates.

(3A) For subsection 941C(8) of the Act, a Financial Services Guide does not have to be given to a client for a financial service provided in the circumstances specified in paragraph 7.6.01(1)(la).

(4) For subsection 941C(8) of the Act, a Financial Services Guide does not have to be given to a client in respect of advice that:

(a) is provided by a providing entity that is:

(i) a product issuer; or

(ii) a related body corporate of a product issuer; or

(iii) a product distributor; or

(iv) an authorised representative of an entity mentioned in subparagraph (i), (ii) or (iii); and

(b) is only general advice in relation to a financial product that is, or a class of financial products that includes, a financial product that is:

(i) issued by the providing entity or a related body corporate of the providing entity; or

(ii) offered by the providing entity; and

(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

(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;

(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 in a derivative by the providing entity;

(c) at the time of the dealing, the providing entity is not a participant in the financial market on which the particular derivative may be traded;

(d) the only financial service that the providing entity provides to the client is the issuing of the derivative.

(6) In this regulation:

product distributor means a licensee that offers a financial product for sale.

(7) If:

(a) a financial service is provided by a person (the secondary service provider) to a client by causing or authorising another person (the intermediary) to provide or pass on the service; and

(b) but for the operation of section 52 of the Act, the secondary service provider would not be taken to be providing the financial service to the client; and

(c) the intermediary does not act on behalf of the secondary service provider in providing or passing on the service for the secondary service provider (see section 911B of the Act); and

(d) the intermediary is a financial services licensee or an authorised representative of a financial services licensee; and

(e) the secondary service provider has a written agreement with the intermediary under which the intermediary agrees to either:

(i) give the secondary service provider’s Financial Services Guide relating to the financial service provided by the secondary service provider to the client; or

(ii) inform the client how to obtain the secondary service provider’s Financial Services Guide relating to the financial service provided by the secondary service provider;

then, for subsection 941C(8) of the Act, the secondary service provider does not have to give the client a Financial Services Guide for the financial service.

7.7.02A Situations when Financial Services Guide is not required

(1) For paragraph 951C(1)(c) of the Act, section 941C of the Act is modified by inserting after subsection 941C(1) the following subsection:

“(1A) The providing entity does not have to give the client a Financial Services Guide if the client has already received the documents referred to in paragraphs (7A)(b) and (c), in the circumstances set out in that subsection, that together contain all of the information that the new Financial Services Guide is required to contain.”

(2) For paragraph 951C(1)(c) of the Act, section 941C of the Act is modified by inserting after subsection 941C(7) the following subsections:

“(7A) The providing entity does not have to give the client a Financial Services Guide in the following circumstances:

(a) if the providing entity will, or is likely to, provide a financial service to the client in a recommendation situation (see section 1012A), an issue situation (see section 1012B) or a sale situation (see section 1012C);

(b) the providing entity gives to the client a Product Disclosure Statement;

(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

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;

(3) In describing the purpose and content of a Statement of Advice or Product Disclosure Statement, the client’s attention must be drawn to a description of the circumstances in which the Statement of Advice or Product Disclosure Statement will be given.

(4) Subregulations (2) and (3) do not prevent the statement required under subregulation (1) from drawing attention to other matters relating to the purpose and content of the Financial Services Guide, the Statement of Advice or the Product Disclosure Statement.

(5) The statement required under subregulation (1) must be:

(a) presented in a manner that is easy for the client to understand; and

(b) displayed prominently in the Financial Services Guide.

(6) A statement is displayed prominently if it:

(a) appears at, or close to, the front of the Financial Services Guide; and

(b) stands out from the other information contained in the Guide.

Note: Ideally, the statement should be placed:

(a) on the inside cover or inside facing page of a paper‑based Financial Services Guide form; or

(b) in an equivalent position of a Financial Services Guide that is not provided in a paper‑based form.

7.7.03A Financial Services Guide given by financial services licensee: arrangements for compensation

(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 arrangements for compensation that the licensee has in place; and

(b) whether those arrangements satisfy the requirements under section 912B of the Act for arrangements for compensation.

(2) This regulation commences, for a particular financial services licensee, on the date that subregulations 7.6.02AAA(1), (2) and (3) take effect for that licensee.

7.7.04 Financial Services Guide given by financial services licensee: remuneration, commission and benefits

(1) For paragraph 942B(2)(k) of the Act, the Financial Services Guide given by a financial services licensee must include information, to the extent that the information is able to be ascertained at the time the Financial Services Guide is given to the client, about all remuneration (including commission) and other benefits that a person (person 1) has received, or is to receive, for referring another person to the financial services licensee.

Overview of regulation

(2) For paragraph 942B(4)(c) of the Act, the information required in particular situations by paragraph 942B(2)(e) in relation to persons mentioned in paragraph 942B(2)(e) or person 1 (see subregulation (1)) is as set out in subregulations (3), (4) and (5).

If remuneration is ascertainable at the time FSG is given

(3) The following information is required if the remuneration, commission or other benefits are able to be worked out at the time the Financial Services Guide is given to the client:

(a) in a case where the remuneration, commission or other benefits are to be received by a person who is a licensed trustee company, either:

(i) the remuneration, commission or other benefits; or

(ii) the remuneration, commission or other benefits stated as a percentage of the income from the estate or as a percentage of the capital value of the estate;

(b) in any other case—the remuneration, commission or other benefits.

If remuneration is not ascertainable at the time FSG is given and personal advice will be given

(4) If:

(a) the remuneration (including commission) or other benefits are not able to be ascertained at the time the Financial Services Guide is given to the client; and

(b) the providing entity reasonably believes that personal advice will be given to the client;

the following information is required:

(i) particulars of the remuneration (including commission) or other benefits, including, to the extent relevant, a statement of the range of amounts or rates of remuneration (including commission) or other benefits; or

(ii) general information about the remuneration (including commission) or other benefits and the manner in which the remuneration (including commission) or other benefits are to be calculated;

(d) a statement that:

(i) if the remuneration (including commission) or other benefits are calculable at the time the personal advice is given, the remuneration (including commission) or other benefits the person receives on specific financial products to which the personal advice relates will be disclosed at the time the personal advice is given or as soon as practicable after that time; or

(ii) if the remuneration (including commission) or other benefits are not calculable at the time the personal advice is given, the manner in which the remuneration (including commission) or other benefits are to be calculated will be disclosed at the time the personal advice is given or as soon as practicable after that time.

If remuneration is not ascertainable at the time FSG is given and personal advice will not be given

(5) If:

(a) the remuneration (including commission) or other benefits are not able to be ascertained at the time the Financial Services Guide is given to the client; and

(b) the providing entity reasonably believes that personal advice will not be given to the client;

the following information is required:

(c) particulars of the remuneration (including commission) or other benefits, including, to the extent relevant, a statement of the range of amounts or rates of remuneration (including commission) or other benefits; or

(d) both of the following:

(i) general information about the remuneration (including commission) or other benefits and the manner in which the remuneration (including commission) or other benefits are to be calculated;

(ii) a statement that the client may request particulars of the remuneration (including commission) or other benefits but that the request must be made within a reasonable time after the client is given the Financial Services Guide and before any financial service identified in the Guide is provided to the client.

7.7.04A Financial services guide given by financial services licensee: more detailed information about remuneration etc

(1) For subsection 942B(7) of the Act, if:

(a) the remuneration (including commission) or other benefits that a person mentioned in paragraph 942B(2)(e) or person 1 in subregulation 7.7.04(1) has received, or is to receive, are not able to be ascertained at the time the Financial Services Guide is given to the client; and

(b) the providing entity reasonably believes that personal advice will not be given to the client; and

(c) the Financial Services Guide does not contain particulars of the remuneration (including commission) or other benefits;

the client may request, from the financial services licensee, particulars of the remuneration (including commission) or other benefits.

(2) A request under subregulation (1) must be made within a reasonable time after the client is given the Financial Services Guide and before any financial service identified in the Guide is provided to the client.

(3) For subregulation (1), the particulars must, to the extent relevant, include a statement of the range of amounts or rates of remuneration (including commission) or other benefits.

Examples:

1 Remuneration is paid within the range of $X to $Y.

2 Commission is paid at rates between X% and Y%.

(4) The particulars mentioned in subregulation (3) must be presented in a manner that is easy for the client to understand.

7.7.04AA Financial Services Guide given by financial services licensee: non‑monetary benefit that is not conflicted remuneration

(1) This regulation is made for paragraph 942B(4)(b) of the Act.

(2) Information about a non‑monetary benefit that, in accordance with paragraph 963C(b) of the Act, is not conflicted remuneration is not required by paragraph 942B(2)(e) of the Act.

Note: Under paragraph 963C(b) of the Act, if a non‑monetary benefit is given to a financial services licensee, or a representative of a financial services licensee, who provides financial advice, is less than the prescribed amount and identical or similar benefits are not given on a frequent or regular basis, the benefit is not conflicted remuneration.

7.7.04AB Financial Services Guide given by authorised representative: non‑monetary benefit that is not conflicted remuneration

(1) This regulation is made for paragraph 942C(4)(b) of the Act.

(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.

7.7.05 Record of advice given by financial services licensee

For subparagraph 942B(2)(g)(iii) of the Act, the period within which a client may request a record of the advice to which that subparagraph relates is 7 years after the day on which the advice is provided.

7.7.05A Financial Services Guide given by authorised representative of financial services licensee: authorised representative number

(1) For paragraph 942C(2)(m) of the Act, the Financial Services Guide given by an authorised representative must include the authorised representative number allocated by ASIC to the authorised representative.

(2) Subregulation (1) does not apply to a Financial Services Guide to which regulation 7.7.05B applies.

7.7.05B Personalised Financial Services Guide

(1) This regulation applies if:

(a) a financial services licensee; or

(b) an authorised representative (the authoriser) of a financial services licensee;

authorises an individual to provide financial services on behalf of the licensee.

(2) For paragraph 942C(4)(b) of the Act, the Financial Services Guide in relation to a financial service does not have to include the information in paragraph 942C(2)(a) of the Act, in respect of the individual, if:

(a) the financial service is dealing in a financial product or the provision of general advice or both; and

(b) the individual provides the financial service in accordance with the authorisation; and

(c) the licensee has reasonable grounds to believe that the identity or remuneration of the individual would not be material to a decision by a retail client whether or not to obtain the financial service; and

(d) the Financial Services Guide includes:

(i) the contact details and licence number of the licensee; and

(ii) a statement setting out, in general terms, the individual’s role and capacity in providing the financial service.

(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

(i) subjects the person to the policies of the franchisor; and

(ii) requires compliance by the person with the policies of the franchisor that were made to give effect to the franchisor’s obligations under the Australian financial services licence; and

(d) the Financial Services Guide produced by the franchisor explains that the franchisor takes responsibility for the services provided by the person.

(3) For paragraph 942C(4)(b) of the Act, the Financial Service Guide in relation to a financial service does not have to include the information in paragraph 942C(2)(a) of the Act, in respect of an authoriser, if:

(a) the financial service is dealing in a financial product or the provision of general advice or both; and

(b) the authoriser provides the financial service in accordance with the authorisation; and

(c) the licensee has reasonable grounds to believe that the identity or remuneration of the authoriser would not be material to a decision by a retail client whether or not to obtain the financial service; and

(d) the Financial Services Guide includes:

(i) the contact details and licence number of the licensee; and

(ii) a statement setting out, in general terms, the authoriser’s role and capacity in providing the financial service.

Note: The Financial Services Guide will contain all information otherwise required by section 942C of the Act.

7.7.05C Exemption from providing certain information in a Financial Services Guide

(1) For paragraph 942B(4)(b) of the Act, for a Financial Services Guide:

(a) information is not required by paragraph 942B(2)(c) of the Act about a financial service to which subsection 941C(6) of the Act applies; and

(b) information is not required by paragraph 942B(2)(e) of the Act in relation to remuneration (including commission) or other benefits that are received only in respect of, or that are only attributable to, a financial service to which subsection 941C(6) of the Act applies.

(2) For paragraph 942C(4)(b) of the Act, for a Financial Services Guide:

(a) information is not required by paragraph 942C(2)(d) of the Act, about a financial service to which subsection 941C(6) of the Act applies; and

(b) information is not required by paragraph 942C(2)(f) of the Act, in relation to remuneration (including commission) or other benefits that are received only in respect of, or that are only attributable to, a financial service to which subsection 941C(6) of the Act applies.

7.7.06 Financial Services Guide given by authorised representative of financial services licensee: description of documents

(1) For paragraph 942C(2)(m) of the Act, the Financial Services Guide given by an authorised representative must include a statement that:

(a) describes the purpose and content of the Financial Services Guide; and

(b) if appropriate:

(i) informs the client that the client may also receive either or both of a Statement of Advice and a Product Disclosure Statement; and

(ii) describes the purpose and content of those documents.

(2) In describing the purpose and content of the Financial Services Guide as mentioned in subregulation (1), the client’s attention must be drawn to the following matters:

(a) the Guide is designed to assist the client in deciding whether to use any of the services offered in the Guide;

(b) the Guide contains information about remuneration that may be paid to the authorised representative and other relevant persons in relation to the services offered;

(5) The statement required under subregulation (1) must be:

(a) presented in a manner that is easy for the client to understand; and

(b) displayed prominently in the Financial Services Guide.

(6) A statement is displayed prominently if it:

(a) appears at, or close to, the front of the Financial Services Guide; and

(b) stands out from the other information contained in the Guide.

Note: Ideally, the statement should be placed:

(a) on the inside cover or inside facing page of a paper‑based Financial Services Guide form; or

(b) in an equivalent position of a Financial Services Guide that is not provided in a paper‑based form.

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: arrangements for compensation

(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 arrangements for compensation that the licensee has in place; and

(b) whether those arrangements satisfy the requirements under section 912B of the Act for arrangements for compensation.

(2) This regulation commences, for a particular authorised representative, on the date that subregulations 7.6.02AAA(1), (2) and (3) take effect for the financial services licensee for whom he or she is a representative.

7.7.07 Financial Services Guide given by authorised representative of financial services licensee: remuneration, commission and benefits

(1) For paragraph 942C(2)(m) of the Act, the Financial Services Guide given by an authorised representative of a financial services licensee must include information, to the extent that the information is able to be ascertained at the time the Financial Services Guide is given to the client, about all remuneration (including commission) and other benefits that a person (person 1) has received, or is to receive, for referring another person to:

(a) the authorised representative; or

(b) the financial services licensee.

Overview of regulation

(2) For paragraph 942C(4)(c) of the Act, the information required in particular situations by paragraph 942C(2)(f) in relation to persons mentioned in paragraph 942C(2)(f) or person 1 (see subregulation (1)) is as set out in subregulations (3), (4) and (5).

If remuneration is ascertainable at the time FSG is given

(3) The following information is required if the remuneration, commission or other benefits are able to be worked out at the time the Financial Services Guide is given to the client:

(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:

(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

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:

(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;

7.7.07A Financial services guide given by authorised representative: more detailed information about remuneration etc

(1) For subsection 942C(7) of the Act, if:

(a) the remuneration (including commission) or other benefits that a person mentioned in paragraph 942C(2)(f) or person 1 in subregulation 7.7.07(1) has received, or is to receive, are not able to be ascertained at the time the Financial Services Guide is given to the client; and

(b) the providing entity reasonably believes that personal advice will not be given to the client; and

(c) the Financial Services Guide does not contain particulars of the remuneration (including commission) or other benefits;

the client may request, from the authorised representative, particulars of the remuneration (including commission) or other benefits.

(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.

Division 2A—Combined Financial Services Guide and Product Disclosure Statement

7.7.08A Combined Financial Services Guide and Product Disclosure Statement

(1) For subsection 942DA(1) of the Act, this regulation specifies the circumstances in which a Financial Services Guide and a Product Disclosure Statement may be combined in a single document.

(1B) This regulation does not apply if the Product Disclosure Statement is for a standard margin lending facility.

(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) a simple managed investment scheme to which Subdivision 4.2C of Division 4 of Part 7.9 applies; or

(b) a simple sub‑fund product to which Subdivision 4.2D of Division 4 of Part 7.9 applies.

(2) A combined Financial Services Guide and Product Disclosure Statement may be issued as a single document if:

(a) the providing entity for the financial service and the product issuer for a product issued in relation to that financial service are the same person; and

(b) the document is divided into 2 separate parts:

(i) a part identifiable as a Financial Services Guide that satisfies the requirements under the Act for a Financial Services Guide; and

(ii) a part identifiable as a Product Disclosure Statement that satisfies the requirements for a Product Disclosure Statement; and

(c) the title ‘Combined Financial Services Guide and Product Disclosure Statement’ is marked on or near the front of the document; and

(d) the document is provided to a client at the earlier of the time at which a Financial Services Guide must be provided and the time at which a Product Disclosure Statement must be provided.

(3) A combined Financial Services Guide and Product Disclosure Statement may be issued as a single document if:

(a) the providing entity for the financial service is a representative or a related body corporate of the product issuer; and

(b) the product is only a basic deposit product, a non‑cash payment facility that is related to a basic deposit product, a general insurance product or a life risk insurance product; and

(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

(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.

Division 2AA—Combined Financial Services Guide and credit guide

7.7.08B Modification of section 942DA of the Act

(1) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if section 942DA of the Act were modified by substituting the heading of the section with the following section heading and subsection heading:

‘942DA Combining a Financial Services Guide and another instrument

Financial Services Guide and a Product Disclosure Statement’.

(2) Part 7.7 of the Act applies as if section 942DA of the Act were also modified by inserting after subsection (3) the following subsection heading and subsections:

‘Financial Services Guide and a credit guide

(4) If:

(a) a person:

(i) is:

(A) a financial services licensee; or

(B) an authorised representative of a financial services licensee; and

(ii) is required to give a Financial Services Guide to a client under this Act; and

(b) the person:

(i) either:

(A) holds an Australian credit licence under the National Consumer Credit Protection Act 2009; or

(B) is a credit representative (within the same meaning as in the National Consumer Credit Protection Act 2009); and

(ii) is required to give a credit guide to a consumer under that Act;

the person may combine the Financial Services Guide and credit guide in a single document.

(5) If the person combines the Financial Services Guide and credit guide in a single document, any statements or information to be included in the credit guide that are identical to statements or information to be included in the Financial Services Guide need only be included once.’

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.

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;

(d) partly paid shares;

(e) debentures;

(f) stapled securities;

(g) securities in a CCIV.

(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 (g), 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 (g), 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;

(6) For small investment advice to a client that is related to the acquisition of one or more of the financial products listed in paragraphs (5)(a) to (c), the threshold amount in subregulation (1) must be calculated to include:

(a) both:

(i) the cost to the client of the initial investment; and

(ii) other amounts that would be committed to by the client if the advice is taken; and

(b) if the investment is not finite—the value of the investment is calculated for the 12‑month period beginning from the date that the record of advice is required by subregulation (10), (11) or (12) to be given to the client.

Examples:

1 Advice given in relation to switching superannuation funds

A person earning $50 000 per annum is given advice to switch an existing superannuation fund balance of $12 000 to another superannuation fund and direct all future superannuation guarantee contributions to that same fund. In this event the total of the superannuation guarantee contributions in the first 12‑month period (ie $50 000 × 0.09 = $4 500) when added to the initial $12 000 transfer, would exceed the $15 000 threshold. In this example the exemption, in section 946AA of the Act, from the requirement to provide a Statement of Advice would not apply.

2 Advice given to acquire non‑derivative instalment warrants

The terms of the non‑derivative instalment warrants are that $10 000 must be paid initially, a second payment of $12 000 in 18 months time and a third and final payment of $12 000 in 3 years time. The investment advice, assuming the client has committed to implementing the advice, concerns a $34 000 investment and therefore the exemption, in section 946AA of the Act, from the requirement to provide a Statement of Advice would not apply.

Note: The total value of all financial investments in relation to which small investment advice is provided is calculated in accordance with subsection 946AA(2) of the Act.

(7) For small investment advice to a client that is related to the disposal of one or more of the financial products listed in paragraphs (5)(a) to (c), the threshold amount in subregulation (1) must be calculated to include:

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

(b) other amounts reasonably related to the divestment that would be expended if the advice is taken.

Note: The total value of all financial investments in relation to which small investment advice is provided is calculated in accordance with subsection 946AA(2) of the Act.

(8) If the total value of an investment, to which investment advice to a client relates, is not able to be ascertained under subsection 946AA(2) of the Act, the investment advice is taken to exceed the threshold amount in subregulation (1).

(9) If an investment, to which investment advice relates, is jointly held by more than 1 client, the sum of the values of each client’s investment must be calculated to determine whether the threshold amount in subregulation (1) is exceeded.

When record of advice is given

(10) For subsection 946AA(4) of the Act, a record of advice is required to be given to a client when, or as soon as practicable after, investment advice is provided to the client and, in any event, subject to subregulation (12), before the providing entity provides the client with any further financial service that arises out of or in connection with the investment advice.

Statement of certain information if record of advice not given when advice provided

(11) If the record of advice is not given to the client when the investment advice is provided, the providing entity must, at the time the investment advice is provided, give the client a statement that contains the information that would be required to be in a Statement of Advice by:

(a) paragraphs 947B(2)(d) and (e) of the Act; or

(b) paragraphs 947C(2)(e) and (f) of the Act;

as the case requires, and by section 947D of the Act, if applicable.

Time‑critical cases

(12) If:

(a) a client expressly instructs that they require a further financial service to be provided immediately, or by a specified time; and

(b) the further financial service arises out of, or in connection with, the investment advice given to the client; and

(c) it is not reasonably practicable to give a record of advice to the client before the further service is provided as so instructed;

the providing entity must give the client the record of advice:

(d) unless paragraph (e) applies—within 5 days after providing the further service, or as soon as practicable; or

(e) if the further financial service is the provision to the client of a financial product and section 1019B of the Act applies to the acquisition of the product by the client—before the start of the period applicable under subsection 1019B(3) of the Act, or sooner if practicable.

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;

(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

(b) provides sufficient details about the statement or information to enable the client:

(i) to identify by a unique identifier the document, or part of the document, that contains the statement or information; and

(ii) to decide whether or not to read the statement or information or obtain a copy of the statement or information; and

(c) states that a copy of the statement or information may be obtained from the providing entity on request, at no charge.

(2) Subject to subregulation (3), the providing entity must give the client the document, or part of the document (whichever is applicable), unless the providing entity has already given the document or part of the document to the client.

(3) If the providing entity is an authorised representative of an Australian financial services licensee, the document, or part of the document (whichever is applicable), may be provided to the client:

(a) by another authorised representative appointed by and acting on behalf of the licensee; or

(b) by the licensee.

(4) If the client requests a copy of a statement or information that the providing entity is not required to include in accordance with subregulation (1), the providing entity must provide the copy as soon as practicable, at no charge.

(5) If a statement or information is not required to be included in a Statement of Advice because of subregulation (1), the statement or information is taken to be included in the Statement of Advice.

(6) The exemption in subregulation (1) does not apply to a statement or information that is required by section 947D or 961H of the Act.

7.7.09BA Statement of Advice from authorised representative

(1) For paragraph 947C(2)(h) of the Act, a Statement of Advice given by an authorised representative in relation to a margin lending facility, or a margin lending facility whose limit is proposed to be increased, within the meaning of subsection 761EA(1) of the Act must include the following information:

(a) whether the client has taken out a loan to fund the secured property or transferred securities contributed by the client for establishing the margin lending facility;

Note: This is sometimes referred to as ‘double gearing’.

(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).

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

For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if subsection 947C(4) of the Act were modified by:

(a) substituting the full stop at the end of paragraph (c) with a semi‑colon; and

(b) inserting after paragraph (c) the following paragraph:

‘(d) that ASIC may specify in a legislative instrument matters ASIC considers to be relevant for the purposes of paragraph 947C(2)(h) of the Act.’

7.7.09BC Statement of Advice given by financial services licensee: non‑monetary benefit that is not conflicted remuneration

(1) This regulation is made for paragraph 947B(4)(b) of the Act.

(2) Information about a non‑monetary benefit that, in accordance with paragraph 963C(b) of the Act, is not conflicted remuneration is not required by paragraph 947B(2)(d) of the Act.

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.

7.7.09C Requirement to keep Statement of Advice and other documents

A Statement of Advice and a document, or part of a document, mentioned in the Statement, must be retained, by the providing entity that gave the Statement, for 7 years after the day on which the Statement is provided to the client.

7.7.10 Products for which a Statement of Advice is not required

For paragraph 946B(5)(c) of the Act, the following are prescribed:

(a) a deposit product that is a facility in relation to which:

(i) there is no minimum period before which funds cannot be withdrawn or transferred from the facility without a reduction in the return generated for the depositor; or

(ii) if there is such a period, it expires on or before the end of the period of 2 years starting on the day on which funds were first deposited in the facility;

(b) travellers’ cheques;

(d) a motor vehicle insurance product (see regulation 7.1.11);

(e) a home building insurance product (see regulation 7.1.12);

(f) a home contents insurance product (see regulation 7.1.13);

(g) a travel insurance product (see regulation 7.1.16);

(h) a personal and domestic property insurance product (see regulation 7.1.17);

(i) a general insurance product prescribed by regulations made for the purposes of subparagraph 761G(5)(b)(viii) (see regulation 7.1.17A).

7.7.10AA Obligation on authorised representative to give a financial services guide

For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if subsection 941B(2) were omitted and the following subsection were substituted:

“(2) A Financial Services Guide must not be given to the person by the providing entity unless the authorising licensee, or each of the authorising licensees, on whose behalf the providing entity provides the financial services, has authorised its distribution by the providing entity.”

7.7.10AAA Record of advice without a recommendation to purchase or sell—content requirements

For subsection 946B(9) of the Act, a record of advice must set out the following:

(a) the investment advice given to a client by the providing entity;

(b) brief particulars of the recommendations made to the client and the basis on which the recommendations are made;

(c) if the providing entity is a financial services licensee—the information that, if a Statement of Advice were to be given, would be required in that Statement by paragraphs 947B(2)(d) and (e) of the Act;

(d) if the providing entity is an authorised representative—the information that, if a Statement of Advice were to be given, would be required in that Statement by paragraphs 947C(2)(e) and (f) of the Act.

Note: A client is entitled to ask the providing entity for a record of advice under subsections 942B(8) and 942C(8) of the Act.

7.7.10AB Financial services guide—contents of guide

Financial services guide given by financial services licensee

(1) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if paragraph 942B(2)(c) of the Act were omitted and the following paragraph were substituted:

“(c) either:

(i) information about the financial services (the authorised services) that the providing entity will be, or is likely to be, providing to the client, and the kinds of financial products to which those services relate; or

(ii) information about the kinds of financial services (the authorised services) that the providing entity is authorised by its licence to provide, and the kinds of financial products to which those services relate; and”.

Financial services guide given by authorised representative

(2) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if paragraphs 942C(2)(c), (d) and (e) of the Act were omitted and the following paragraphs were substituted:

“(c) either:

(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:

(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

the providing entity must comply with a request made in accordance with that statement for a record of that advice.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).”

7.7.10AD Financial services guide

Financial services guide given by authorised representative—contents of guide

(1) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if paragraph 942C(2)(h) were omitted and the following paragraph were substituted:

“(h) if the providing entity, when acting as representative of the authorising licensee or any of the authorising licensees, provides further advice—a statement in relation to which the following requirements are satisfied:

(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;

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

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 given, which may include the client's relevant personal circumstances, in which case paragraph (a) of this subsection would be satisfied.

(2A) This subsection applies if:

(a) the client had a relationship with the providing entity before:

(i) if the providing entity is a licensee—the day on which the providing entity obtained its Australian financial services Licence; or

(ii) if the providing entity is an authorised representative—the day on which the licensee on whose behalf the advice is provided obtained its Australian financial services Licence; and

(b) the providing entity gave the client advice (the earlier advice) of a kind that if it were given after the day the Australian financial services Licence was obtained would be considered to be personal advice; and

(c) the client’s relevant personal circumstances in relation to the further advice are not significantly different from the client’s investment objectives, financial situation and particular needs that were determined for the earlier advice; and

(d) so far as the basis on which advice is given relates to other matters—the basis on which the further advice is given is not significantly different from the basis on which the earlier advice was given.

(3) At the same time or as soon as practicable after the further advice is given to the client, the client must be given a statement that contains the information that would, if a Statement of Advice were to be given, be required to be in the Statement by paragraphs 947B(2)(d) and (e), or 947C(2)(e) and (f), as the case requires, and by section 947D, if applicable.

(3A) The providing entity must keep a record of the further advice and, in doing so, must comply with any applicable requirements of regulations made for the purposes of this subsection.

Note 1: Failure to comply with this subsection is an offence (see subsection 1311(1)).

Note 2: For the client’s right to a record of the advice, see subsections 942B(8) and 942C(8).

Note 3: Subsections 947D(2) and (3) require additional information to be included in the record in certain circumstances.

Second situation: certain basic deposit and other products

(5) The providing entity does not have to give the client a Statement of Advice if the advice relates to any or all of the following:

(a) a basic deposit product;

(b) a facility for making non‑cash payments (see section 763D) that is related to a basic deposit product;

(6) However, if subsection (4) applies and the client is not given a Statement of Advice, the client must instead, when, or as soon as practicable after, the advice is provided, be given the information that would be required to be in the Statement of Advice by paragraphs 947B(2)(d) and (e), or 947C(2)(e) and (f), as the case requires.”

7.7.10AF Various consequential amendments to Division 7 of Part 7.7 concerning situations where Financial Services Guides do not have to be given

(1) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if the provision set out in column 2 of the following table were modified as set out in columns 3 and 4:

Column 1	Column 2	Column 3	Column 4
Item	provision of Act	is modified by…	and…
1	paragraph (a) of the definition of defective in subsection 952B(1)	omitting “941D(2)”	substituting “941D(2) or paragraph 941C(7A)(c) or”
2	subparagraph (a)(iv) of the definition of defective in subsection 952B(1)	omitting “941D(2)”	substituting “941D(2) or paragraph 941C(7A)(c) or”
3	paragraph (d) of the definition of disclosure document or statement in subsection 952B(1)	omitting “946C(2)”	substituting “946C(2) or paragraph 941C(7A)(c),”
4	paragraph 952E(2)(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 of Advice” and substituting “, a Statement of Advice or a statement referred to in paragraph 941C(7A)(c)”.

(3) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if subsection 941D(4) were omitted and the following subsection were substituted:

“(4) The client must then be given:

(a) the statement referred to in paragraph 941C(7A)(c) together with a Product Disclosure Statement as required by paragraph 941C(7A)(b)) in accordance with the requirements of subsections 941C(7A) and (7B); or

(b) a Financial Services Guide;

within 5 business days after having given the statement referred to in subsection (3), or sooner if practicable.”

(4) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if the following subsection were inserted at the end of section 941F:

“(2) If:

(a) a statement referred to in paragraph 941C(7A)(c) is given to the client before the financial service is provided; and

(b) the following conditions are satisfied:

(i) there is a change in circumstances before the service is provided and the statement does not contain the information it would be required to contain if it were given to a person immediately after that change;

(ii) the fact that the statement does not contain the up to date information is materially adverse from the point of view of a reasonable person deciding, as a retail client, whether to proceed to be provided with the financial service;

the providing entity must, before the service is provided, give the client another statement of the kind referred to in paragraph 941C(7A)(c) that contains the up to date information before the service is provided.”

7.7.10AG Various consequential amendments to Division 7 of Part 7.7

(1) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if the provisions set out in column 2 of the following table were modified as set out in columns 3 and 4:

Column 1	Column 2	Column 3	Column 4
Item	provision of Act	is modified by…	and…
1	paragraph (b) of the definition of defective in subsection 952B(1)	omitting “Statement of Advice”	substituting “Statement of Advice, a record of advice required by subsection 946B(3A),”
2	paragraph 952E(2)(a)	omitting “Statement of Advice”	substituting “Statement of Advice, a record of advice required by subsection 946B(3A),”
3	paragraph 952F(1)(b)	omitting “Statement of Advice”	substituting “Statement of Advice, a record of advice required by subsection 946B(3A),”
4	subparagraph 952F(1)(c)(i)	omitting “Statement of Advice”	substituting “Statement of Advice, a record of advice required by subsection 946B(3A),”
5	paragraph 952G(1)(b)	omitting “Statement of Advice”	substituting “Statement of Advice, a record of advice required by subsection 946B(3A),”
6	subparagraph 952G(1)(c)(i)	omitting “Statement of Advice”	substituting “Statement of Advice, a record of advice required by subsection 946B(3A),”
7	paragraph (b) of the definition of defective in subsection 953A(1)	omitting “Statement of Advice”	substituting “Statement of Advice, a record of advice required by subsection 946B(3A),”

(2) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if the provisions set out in column 2 of the following table were modified as set out in column 3:

Column 1	Column 2	Column 3
Item	provision of Act	is modified by…
1	the definition of defective in subsection 952B(1)	inserting after subparagraph 952B(1)(b)(ii): (iiA) if it is a record of advice required by subsection 946B(3A)—there is an omission from the record of advice of material required by subsection 946B(3A) or section 947D; or
2	the definition of disclosure document or statement in subsection 952B(1)	inserting after paragraph (c) of the definition the following paragraph: (ca) a record of advice required by subsection 946B(3A); or
3	the definition of defective in subsection 953A(1)	inserting after subparagraph 952B(1)(b)(ii) the following paragraph: (iiA) if it is a record of advice required by subsection 946B(3A)—there is an omission from the record of advice of material required by subsection 946B(3A) or section 947D; or
4	the definition of disclosure document or statement in subsection 953A(1)	inserting after paragraph (c) of the definition the following paragraph: (ca) a record of advice required by subsection 946B(3A); or

7.7.10AI Obligation to warn client that advice does not take account of client’s objectives, financial situation or needs—carbon units, Australian carbon credit units and eligible international emissions units

For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies in relation to a carbon unit, an Australian carbon credit unit or an eligible international emissions unit as if paragraph 949A(2)(c) read as follows:

“(c) if the advice relates to the acquisition, or possible acquisition, of a carbon unit, the providing entity must:

(i) provide the client with the address of the website of the Clean Energy Regulator mentioned in section 202 of the Clean Energy Act 2011; and

(ii) inform the client that the client should consider each statement mentioned in section 202 of the Clean Energy Act 2011 before making any decision about whether to acquire the financial product; and

(d) if the advice relates to the acquisition, or possible acquisition, of an Australian carbon credit unit, the providing entity must:

(i) provide the client with the address of the website of the Clean Energy Regulator mentioned in section 162 of the Carbon Credits (Carbon Farming Initiative) Act 2011; and

(ii) inform the client that the client should consider each statement mentioned in section 162 of that Act before making any decision about whether to acquire the financial product; and

(e) if the advice relates to the acquisition, or possible acquisition, of an eligible international emissions unit, the providing entity must:

(i) provide the client with the address of the website of the Clean Energy Regulator mentioned in section 61 of the Australian National Registry of Emissions Units Act 2011; and

(ii) inform the client that the client should consider each statement mentioned in section 61 of the Australian National Registry of Emissions Units Act 2011 before making any decision about whether to acquire the financial product.”.

7.7.10A Statements of Advice—requirement to state information as amounts in dollars

(1) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if paragraph 947B(2)(h) of the Act were modified to read as follows:

‘(h) unless in accordance with the regulations and a determination by ASIC, information to be disclosed in accordance with paragraph (d) and subparagraph (e)(i) must be stated as amounts in dollars.’.

(2) For paragraph 951C(1)(a) of the Act, a providing entity does not have to provide the information mentioned in paragraph 947B(2)(h) of the Act, in the form required by that paragraph, in a Statement of Advice prepared before 1 January 2005.

(3) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if paragraph 947C(2)(i) of the Act were modified to read as follows:

‘(i) unless in accordance with the regulations and a determination by ASIC, information to be disclosed in accordance with paragraph (e) and subparagraph (f)(i) must be stated as amounts in dollars.’.

(4) For paragraph 951C(1)(a) of the Act, a providing entity does not have to provide the information mentioned in paragraph 947C(2)(i) of the Act, in the form required by that paragraph, in a Statement of Advice prepared before 1 January 2005.

(5) For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if paragraph 947D(2)(d) of the Act were modified to read as follows:

‘(d) unless in accordance with the regulations and a determination by ASIC, information to be disclosed in accordance with paragraph (a) must be stated as amounts in dollars.’.

(6) For paragraph 951C(1)(a) of the Act, a providing entity does not have to provide the information mentioned in paragraph 947D(2)(d) of the Act, in the form required by that paragraph, in a Statement of Advice prepared before 1 January 2005.

7.7.10B Insertion of definition—further advice

For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if the following definition were inserted in section 9:

“further advice means advice to which subsection 946B(2) or (2A) applies.”

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 9.

7.7.10D Additional information in Statement of Advice

For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if subsection 947D(2) of the Act were modified by omitting “Statement of Advice” and substituting “Statement of Advice or the record of advice under subsection 946B(3A), as the case requires,”.

7.7.10E Additional information in Statement of Advice

For paragraph 951C(1)(c) of the Act, Part 7.7 of the Act applies as if subsection 947D(3) of the Act were modified by omitting “Statement of Advice” and substituting “Statement of Advice or the record of advice under subsection 946B(3A), as the case requires”.

7.7.11 Statement of Advice given by financial services licensee

(1) For paragraph 947B(2)(g) of the Act, a Statement of Advice given by a financial services licensee must include information about all remuneration (including commission) and other benefits that a person (person 1) has received, or is to receive, for referring another person to the financial services licensee.

(2) For paragraph 947B(2)(h) of the Act, if ASIC determines that, for a compelling reason, it is not possible to state information to be disclosed in accordance with paragraph 947B(2)(d) or subparagraph 947B(2)(e)(i) as an amount in dollars, the information may be set out as a description of the amount as a percentage of a specified matter (including worked dollar examples, unless that is inappropriate).

(3) For paragraph 947B(2)(h) of the Act, if ASIC determines that, for a compelling reason, it is not possible to state information to be disclosed in accordance with paragraph 947B(2)(d) or subparagraph 947B(2)(e)(i) as an amount in dollars, or to describe the amount as a percentage, the information may be set out as a description of the method of calculating the remuneration, benefits or interests (including worked dollar examples, unless that is inappropriate).

(4) A determination under subregulation (2) or (3) must be:

(a) in writing; and

(b) published in the Gazette.

(5) The statements and descriptions must be presented in a manner that is easy for the client to understand.

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

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

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 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

the information may be set out as a description of the amount as a percentage of a specified matter (including worked dollar examples, unless that is inappropriate).

(2) For paragraph 947C(2)(i) of the Act, if ASIC determines that, for a compelling reason, based on the nature of a financial product or service, or the nature of the information, to state the information as an amount in dollars, or to describe the amount as a percentage:

(a) would impose an unreasonable burden on a providing entity, or a class of providing entities; or

(b) would impose an unreasonable burden on a providing entity, or a class of providing entities, within a period specified in the determination; or

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.

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

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

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.

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.

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 that, because of subparagraph 8(2)(b)(ii) or (iii) of the Insurance Regulations 2024, may be issued by an unauthorised foreign insurer (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: Subparagraphs 8(2)(b)(ii) and (iii) of the Insurance Regulations 2024 apply in relation to insurance contracts for:

(a) atypical risks; and

(b) risks that cannot reasonably be placed in Australia.

(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

(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.

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.

Part 7.7A—Best interests obligations and remuneration

Note: Regulations 7.7A.01 to 7.7A.04 are reserved for future use.

Division 2—Best interests obligations

7.7A.05 Best interests duty—basic banking products etc.

(1) This regulation:

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

(b) prescribes a circumstance in which the provider is not required to prove that he or she has taken the steps mentioned in paragraphs 961B(2)(d), (e), (f) and (g) of the Act in relation to advice that relates to a basic banking product or general insurance product.

(2) The provider is not required to prove that he or she has taken the steps if:

(a) the provider is:

(i) an agent or employee of an Australian ADI; or

(ii) otherwise acting by arrangement with an Australian ADI under the name of the Australian ADI; and

(b) the subject matter of the advice sought by the client relates only to the following:

(i) a basic banking product;

(ii) a general insurance product;

(iii) consumer credit insurance;

(iv) a combination of any of those products.

7.7A.06 Best interests duty—general insurance products

(1) This regulation:

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

(b) prescribes a circumstance in which the provider is not required to prove that he or she has taken the steps mentioned in paragraphs 961B(2)(d), (e), (f) and (g) of the Act.

(2) The provider is not required to prove that he or she has taken the steps to the extent that the subject matter of the advice sought by the client is a general insurance product.

Division 3—Charging ongoing fees to clients

7.7A.10 Arrangements that are not ongoing fee arrangements

(1) This regulation is made for subsection 962A(5) of the Act.

(2) An arrangement of a kind mentioned in subsection 962A(1) or (2) of the Act is not an ongoing fee arrangement to the extent that the arrangement relates to a product fee mentioned in subregulation (3).

(3) Each of the following is a product fee:

(a) a fee for the administration, management or operation of a financial product that is charged to a retail client to which the product is issued by the issuer of the product;

Example 1: A monthly account keeping fee charged by the provider of a basic deposit product.

Example 2: A monthly administration or investment fee charged by a trustee of a superannuation fund or a responsible entity of a registered scheme.

(b) a fee that:

(i) is a cost of providing financial product advice; and

(ii) under section 99F of the Superannuation Industry (Supervision) Act 1993, is not prohibited or prevented from being passed on to a member of a regulated superannuation fund.

7.7A.11 Fee disclosure statements

Product fees

(1) For the purposes of paragraph 962H(3)(a) of the Act, information about a product fee mentioned in subregulation 7.7A.10(3) is not required by subsection 962H(2) or (2A) of the Act.

Ongoing fee arrangements during transition period

(2) For the purposes of paragraphs 962H(2)(f) and 962H(3)(a) of the Act, a fee disclosure statement for:

(a) an ongoing fee arrangement that is in force immediately before 1 July 2021; and

(b) a transition day (within the meaning of Part 10.46 of the Act);

is not required to include, but is required to include a reasonable estimate of, the following:

(c) an amount mentioned in paragraph 962H(2)(a) of the Act if the amount relates to the period of 60 days ending immediately before that transition day;

(d) information about a service mentioned in paragraph 962H(2)(d) of the Act if the service was received during the period of 60 days ending immediately before that transition day.

Note: This provision relates to sections 962G and 962H of the Act as modified for the 12‑month transition period from 1 July 2021 to 30 June 2022: see section 1673C of the Act.

7.7A.11AA Compliance records required to be kept by fee recipients

(1) This regulation is made for the purposes of section 962X of the Act.

(2) A fee recipient must keep the following records in relation to an ongoing fee arrangement the fee recipient has with the client:

(a) each fee disclosure statement the fee recipient has given to the client;

(b) the date on which each such fee disclosure statement was given to the client, and the manner in which it was given;

(c) if the client gives any of the following notifications to the fee recipient—the notification and the date on which the notification was given:

(i) a notification of an election to renew the ongoing fee arrangement;

(ii) a notification of an election not to renew the ongoing fee arrangement;

(iii) a notification terminating the ongoing fee arrangement;

(d) if the ongoing fee arrangement has terminated—the date on which the arrangement terminated and the basis on which the arrangement terminated.

(3) A fee recipient must also keep the following records in relation to an ongoing fee arrangement:

(a) each consent for deductions relating to the ongoing fee arrangement given to the fee recipient for the purposes of section 962R or 962S of the Act;

(b) the date on which each such consent was given;

(d) the date on which each such notice was given;

(e) each confirmation of receipt of such notice given by the fee recipient under subsection 962U(2) of the Act;

(f) each of the following communications in relation to the consent referred to in paragraph (a), and the date on which the communication occurred:

(i) giving a copy of the consent as required under paragraph 962S(3)(c) of the Act;

(ii) giving a copy of a notice withdrawing or varying the consent as required under paragraph 962U(2)(b) of the Act;

(iii) giving written notice of the cessation of the consent under subsection 962V(2) of the Act;

(g) if the fee recipient arranges with another person (the account provider) for deductions relating to the ongoing fee arrangement to be made, as referred to in paragraph 962S(1)(d) of the Act—the details of the arrangement with the account provider.

Division 4—Conflicted remuneration

Subdivision 1—Benefits in relation to life risk insurance products that are conflicted remuneration

7.7A.11A What this Subdivision is about

This Subdivision:

(a) is made for the purposes of section 963AA of the Act; and

(b) prescribes circumstances, in addition to those set out in section 963A, in which a benefit given to a financial services licensee, or a representative of a financial services licensee, in relation to a life risk insurance product, or life risk insurance products, is conflicted remuneration.

7.7A.11B Circumstances in which benefits in relation to life risk insurance products are conflicted remuneration

Giving information in relation to life risk insurance products

(1) A benefit given to a financial services licensee, or a representative of a financial services licensee, is conflicted remuneration if:

(a) the benefit is given to the licensee or representative in relation to information given to a person, or persons, in relation to a life risk insurance product, or life risk insurance products; and

(b) access to the benefit, or the value of the benefit, is dependent on:

(i) the value of a life risk insurance product, or life risk insurance products, subsequently acquired by a person or persons to whom, or in relation to whom, the information is given; or

(ii) the value of a life risk insurance product, or life risk insurance products, subsequently varied that are held by a person or persons to whom, or in relation to whom, the information is given; or

(iii) the number of life risk insurance products subsequently acquired by a person or persons to whom, or in relation to whom, the information is given; or

(iv) the number of life risk insurance products subsequently varied that are held by a person or persons to whom, or in relation to whom, the information is given; and

(c) the information is not given in the course of, or as a result of, the licensee or representative, or an associate of the licensee or representative, providing financial product advice; and

(d) if the information is given in the course of providing a financial product—the information is not given in the course of providing that product to a person as a wholesale client, or to persons as wholesale clients.

Dealing in life risk insurance products

(2) A benefit given to a financial services licensee, or a representative of a financial services licensee, is conflicted remuneration if:

(a) the benefit is given to the licensee or representative in relation to a dealing in a life risk insurance product with a person as a retail client, or dealings in life risk insurance products with persons as retail clients; and

(b) access to the benefit, or the value of the benefit, is dependent on:

(i) the value of the life risk insurance product to which the dealing relates, or the life risk insurance products to which the dealings relate; or

(ii) the number of life risk insurance products to which the dealings relate; and

(c) the dealing, or dealings, do not occur in the course of, or as a result of, the licensee or representative, or an associate of the licensee or representative:

(i) providing financial product advice; or

(ii) giving information in circumstances in which the benefit would be conflicted remuneration under subregulation (1).

7.7A.11C Circumstances in which benefits in relation to information about life risk insurance products are not conflicted remuneration

Monetary benefits

(1) Despite subregulation 7.7A.11B(1), a monetary benefit given to a financial services licensee, or a representative of a financial services licensee, in relation to information given to a person, or persons, in relation to a life risk insurance product, or life risk insurance products, is not conflicted remuneration if:

(a) because of the nature of the benefit or the circumstances in which it is given, the benefit could not reasonably be expected to influence:

(i) whether the licensee or representative gives the information to the person or persons; or

(ii) the way in which the licensee or representative presents the information in giving it to the person or persons; or

(b) none of the products is a life risk insurance product covered by subsection 963B(2) of the Act and either:

(i) the benefit ratio for the benefit is the same for the year in which the product or products are issued as it is for each year in which the product or products are continued; or

(ii) the benefit ratio requirements and clawback requirements are satisfied in relation to the benefit; or

(d) if the information is given in the course of providing a financial product to a person as a retail client or to persons as retail clients—the benefit is given by that person, or those persons; or

(e) the benefit is given to the licensee as part of the purchase or sale of all or part of the licensee’s business, or to the representative as part of the purchase or sale of all or part of the representative’s business.

Non‑monetary benefits

(2) Despite subregulation 7.7A.11B(1), a non‑monetary benefit given to a financial services licensee, or a representative of a financial services licensee, in relation to information given to a person, or persons, in relation to a life risk insurance product, or life risk insurance products, is not conflicted remuneration if:

(a) because of the nature of the benefit or the circumstances in which it is given, the benefit could not reasonably be expected to influence:

(i) whether the licensee or representative gives the information to the person or persons; or

(ii) the way in which the licensee or representative presents the information in giving it to the person or persons; or

(b) each of the following is satisfied:

(i) the licensee or representative is the final recipient of the benefit, or all or part of the benefit passes through the licensee or representative to another financial services licensee, or representative of a financial services licensee, who is the final recipient of the benefit;

(ii) the value of the benefit in the hands of each final recipient is less than $300;

(iii) identical or similar benefits are not given on a frequent or regular basis; or

(i) the benefit has a genuine education or training purpose;

(ii) the benefit is relevant to giving information in relation to life risk insurance products;

(iii) if education or training is provided through an education or training course (within the meaning of regulation 7.7A.14)—subregulations 7.7A.14(3) and (4) are satisfied in relation to the education or training;

(iv) if education or training is provided other than through an education or training course—the dominant purpose of the benefit is education and training; or

(d) each of the following is satisfied:

(i) the benefit is the provision of information technology software or support;

(ii) the benefit is relevant to giving information in relation to a life risk insurance product, or life risk insurance products; or

(e) if the information is given in the course of providing a financial product to a person as a retail client or to persons as retail clients—the benefit is given by that person, or those persons.

7.7A.11D Circumstances in which benefits in relation to dealings in life risk insurance products are not conflicted remuneration

Monetary benefits

(1) Despite subregulation 7.7A.11B(2), a monetary benefit given to a financial services licensee, or a representative of a financial services licensee, in relation to a dealing in a life risk insurance product with a person as a retail client, or dealings in life risk insurance products with persons as retail clients, is not conflicted remuneration if:

(a) because of the nature of the benefit or the circumstances in which it is given, the benefit could not reasonably be expected to influence:

(i) whether the licensee or representative deals in the life risk insurance product, or life risk insurance products; or

(ii) the way in which the licensee or representative deals in the life risk insurance product, or life risk insurance products; or

(b) none of the products is a life risk insurance product covered by subsection 963B(2) of the Act and either:

(i) the benefit ratio for the benefit is the same for the year in which the product or products are issued as it is for each year in which the product or products are continued; or

(ii) the benefit ratio requirements and clawback requirements are satisfied in relation to the benefit; or

(d) the benefit is given to the licensee or representative by the retail client, or retail clients; or

(e) the benefit is paid to the licensee as part of the purchase or sale of all or part of the licensee’s business, or to the representative as part of the purchase or sale of all or part of the representative’s business.

Non‑monetary benefits

(2) Despite subregulation 7.7A.11B(2), a non‑monetary benefit given to a financial services licensee, or a representative of a financial services licensee, in relation to a dealing in a life risk insurance product with a person as a retail client, or dealings in life risk insurance products with persons as retail clients, is not conflicted remuneration if:

(a) because of the nature of the benefit or the circumstances in which it is given, the benefit could not reasonably be expected to influence:

(i) whether the licensee or representative deals in the life risk insurance product, or life risk insurance products; or

(ii) the way in which the licensee or representative deals in the life risk insurance product, or life risk insurance products; or

(b) each of the following is satisfied:

(ii) the value of the benefit in the hands of each final recipient is less than $300;

(iii) identical or similar benefits are not given on a frequent or regular basis; or

(i) the benefit has a genuine education or training purpose;

(ii) the benefit is relevant to dealing in life risk insurance products;

(iii) if the education or training is provided through an education or training course (within the meaning of regulation 7.7A.14)—subregulations 7.7A.14(3) and (4) are satisfied in relation to the education or training;

(iv) if the education or training is provided other than through an education or training course—the dominant purpose of the benefit is education and training; or

(d) each of the following is satisfied:

(i) the benefit is the provision of information technology software or support;

(ii) the benefit is relevant to dealing in life risk insurance products; or

(e) the benefit is given to the licensee or representative by the retail client, or retail clients.

Subdivision 2—Monetary benefits that are not conflicted remuneration

7.7A.12 What subdivision is about

This subdivision:

(a) is made for paragraph 963B(1)(e) of the Act; and

(b) prescribes the circumstances in which a monetary benefit given to a financial services licensee, or representative of a financial services licensee, (the provider) who provides financial product advice to persons as retail clients is not conflicted remuneration.

Note 2: A reference in this Division to giving a benefit includes a reference to causing or authorising it to be given (see section 52 of the Act).

Note 3: Under the governing rules of some regulated superannuation funds, a member may seek advice on the basis that the trustee of the fund will pay the licensee or representative for the advice and then recover the amount paid from the assets of the fund attributed to that member. In that case, the member has caused or authorised the amount to be paid to the licensee or representative. If the operation of section 52 of the Act and these regulations means that the payment is not conflicted remuneration, the trustee’s obligations under section 62 of the Superannuation Industry (Supervision) Act 1993 (which deals with the purposes for which a trustee may act in maintaining a regulated superannuation fund) will not be affected.

7.7A.12B Stamping fees

(1) A monetary benefit is not conflicted remuneration if:

(a) it is a stamping fee given to facilitate an approved capital raising; and

(b) in a case where the benefit is given on or after 1 July 2020—the approved capital raising does not relate to an approved financial product that consists of:

(i) interests, or proposed interests, in a company (other than an infrastructure entity) that is listed, or proposed to be listed, and whose main purpose is investing in passive investments; or

(ii) interests, or proposed interests, in a managed investment scheme (other than a real estate investment trust or an infrastructure entity) that is listed or proposed to be listed.

(2) In this regulation:

approved capital raising means:

(a) an offer to issue an approved financial product; or

(b) an offer to sell an approved financial product;

where the purpose of the offer is to raise funds for the person issuing or selling the approved financial product.

approved financial product means:

(a) debentures, stocks or bonds that are, or are proposed to be, issued by a government; or

(b) shares in, or debentures of, a body that are, or are proposed to be, quoted on a prescribed financial market; or

(c) interests in a managed investment scheme that are, or are proposed to be, quoted on a prescribed financial market; or

(d) a right to acquire, by way of issue, shares, debentures or interests mentioned in paragraph (b) or (c).

infrastructure assets means any of the following:

(a) airports;

(b) electricity generation, transmission or distribution facilities;

(d) hospitals;

(e) ports;

(f) prisons;

(g) railways;

(h) roads;

(i) sewerage facilities;

(j) telecommunication facilities;

(k) water supply facilities.

infrastructure entity means a company or managed investment scheme whose main purpose is to operate or invest in infrastructure assets.

interest, in a company or managed investment scheme, does not include a stapled real estate or infrastructure interest in the company or managed investment scheme.

passive investments, in relation to a company, means any of the following:

(a) shares, units, options, rights or similar interests;

(b) financial instruments (such as loans, debts, debentures, bonds, promissory notes, futures contracts, forward contracts, currency swap contracts and a right or option in respect of a share, security, loan or contract);

(c) an asset whose main use by the company in the course of carrying on its business is to derive interest, an annuity, rent, royalties or foreign exchange gains unless:

(i) the asset is an intangible asset and has been substantially developed, altered or improved by the company so that its market value has been substantially enhanced; or

(ii) its main use for deriving rent was only temporary;

(d) goodwill.

real estate investment trust means a managed investment scheme whose main purpose is to invest in real property.

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.

stapled real estate or infrastructure interest: an interest is a stapled real estate or infrastructure interest if:

(a) the interest is an interest in a company or managed investment scheme; and

(b) the interest can only be transferred together with one or more other interests in one or more companies, managed investment schemes or other entities; and

(c) the companies, managed investment schemes or other entities mentioned in paragraphs (a) and (b) are engaging in activities together for the main purpose of:

(i) investing in real property; or

(ii) operating or investing in infrastructure assets.

7.7A.12C Time‑sharing schemes

A monetary benefit is not conflicted remuneration if the benefit is given for advice that relates to an interest in a time‑sharing scheme.

7.7A.12D Brokerage fees

(1) A monetary benefit is not conflicted remuneration if:

(a) the benefit consists of a percentage, of no more than 100%, of a brokerage fee that is given to a provider who is a trading participant of a prescribed financial market or the market known as the ASX24; and

(b) the provider, directly or indirectly, gives the benefit to a representative of the provider.

Note 1: For prescribed financial market, see regulation 1.0.02A.

Note 2: The ASX24 is the financial market operated by Australian Securities Exchange Limited that was formerly known as the Sydney Futures Exchange.

(1A) A monetary benefit is not conflicted remuneration if:

(a) the benefit is a fee paid between a financial services licensee that is a trading participant of a prescribed financial market and a financial services licensee that is not a trading participant in respect of dealings undertaken by a retail client through a specified service; and

(b) each of those trades is executed by the trading participant on behalf of the retail client; and

(c) the fee is a percentage, not exceeding 100%, of a brokerage fee paid directly or indirectly by the retail client; and

(d) no portion of the benefit is paid to a person other than the trading participant or the licensee that is not a trading participant.

(2) In this regulation:

brokerage fee means a fee that a retail client pays to a provider in relation to a transaction in which the provider, on behalf of the retail client, deals in a financial product that is traded on:

(a) a prescribed financial market; or

(aa) the market known as the ASX24; or

(b) a prescribed foreign financial market.

Note 1: Regulations 7.7A.17 and 7.7A.18 relate to exemptions in relation to the charging of asset‑based fees on borrowed amounts.

Note 2: The ASX24 is the financial market operated by Australian Securities Exchange Limited that was formerly known as the Sydney Futures Exchange.

prescribed foreign financial market means a financial market that:

(a) has its principal place of business in a foreign country; and

(b) has been authorised by an authority in that country that is a signatory to the International Organization of Securities Commissions’ Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information of May 2002.

specified service means a service which:

(a) is provided for retail clients under the name or brand name of:

(i) the financial services licensee that is not a trading participant; or

(ii) the trading participant and the financial services licensee that is not a trading participant; and

(b) relates to the dealing, on behalf of the retail client, in a financial product traded on:

(i) a prescribed financial market; or

(ii) a prescribed foreign financial market; and

(i) by direct electronic access;

(ii) by telephone, but only if:

(A) direct electronic access is not available for a temporary period, or the retail client expresses a preference that the service be provided by telephone; and

(B) neither the trading participant nor the financial services licensee that is not a trading participant is to provide financial product advice to the retail client by telephone in relation to the dealing undertaken on the retail client’s behalf; and

(d) is provided in circumstances in which neither the trading participant nor the financial services licensee that is not a trading participant provides personal advice to the retail client in relation to the dealing undertaken on the retail client’s behalf.

trading participant of a prescribed financial market or the market known as the ASX24 means a person who:

(a) is a participant of the market admitted under the market’s operating rules; and

(b) is allowed, under the market’s operating rules, to deal in one or more of the financial products that are able to be traded on the market.

Note: The ASX24 is the financial market operated by Australian Securities Exchange Limited that was formerly known as the Sydney Futures Exchange.

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

A monetary benefit is not conflicted remuneration if the benefit is given to the provider by a retail client in relation to the provider dealing in a financial product on behalf of the client.

7.7A.12EA Application of ban on conflicted remuneration—purchase or sale of financial advice business

A monetary benefit is not conflicted remuneration to the extent that:

(a) the benefit is given to a financial services licensee or a representative of the licensee; and

(b) the benefit is paid as part of:

(i) the purchase or sale of all or part of the licensee’s financial advice business; or

(ii) the purchase or sale of all or part of the representative’s financial advice business; and

(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 3—Monetary benefits that relate to life risk insurance products

7.7A.12EB Life risk insurance products—clawback requirements related to cancellation etc.

For the purposes of subparagraph 963BA(3)(a)(i) of the Act, the prescribed circumstances are that the life risk insurance product, or the relevant one of the life risk insurance products, is cancelled or is not continued because:

(a) the person insured dies; or

(b) the person insured commits an act of self‑harm; or

(c) the person insured reaches an age that, under the terms of the life risk insurance product under which the person is insured, has the result that the product is cancelled or is not continued; or

(d) an administrative error has been made.

7.7A.12EC Life risk insurance products—clawback requirements related to reduction of policy cost

For the purposes of subparagraph 963BA(3)(a)(ii) of the Act, the prescribed circumstances are that the policy cost for the life risk insurance product, or the relevant one of the life risk insurance products, is reduced because:

(a) the person who issued the product and the person to whom the product is issued agree that there is a reduction in a risk in relation to a person insured under the product; or

(b) the person who issued the product reduces the premium for the product without changing the risks covered, or the benefits available, in relation to any person insured under the product; or

(i) a rebate is paid or a discount applied;

(ii) it is reasonable in all the circumstances to conclude that the rebate is paid or discount applied to induce the person to whom the product is issued to acquire, or to continue to hold, the product; or

(d) a benefit payable in relation to a person insured under the product has been, or is being, paid; or

(e) an administrative error has been made.

Subdivision 4—Other monetary and non‑monetary benefits that are not conflicted remuneration

7.7A.12F What subdivision is about

This subdivision:

(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.

7.7A.12G General insurance

A benefit is not conflicted remuneration if the benefit is given in relation to a general insurance product.

Note: If a benefit is given in relation to a financial product that consists of both general insurance and life risk insurance, the benefit is to be treated as relating to a general insurance product and a life risk insurance product.

7.7A.12H Basic banking and general insurance products

A benefit is not conflicted remuneration if:

(a) to the extent that the benefit is given in relation to financial product advice, the benefit only relates to the following financial products:

(i) a basic banking product;

(ii) a general insurance product;

(iii) consumer credit insurance;

(iv) a combination of any of those products; and

(b) the provider does not, at the same time, provide advice about any other financial products; and

(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.

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.

7.7A.14 Non‑monetary benefit given in certain circumstances not conflicted remuneration: education or training course

(1) This regulation is made for subparagraph 963C(c)(iii) of the Act.

(2) This regulation sets out requirements if a non‑monetary benefit to which subparagraphs 963C(c)(i) and (ii) of the Act apply is the provision of an education or training course to a financial services licensee, or a representative of a financial services licensee.

Note: Under paragraph 963C(c) of the Act, if certain non‑monetary benefits have a genuine education or training purpose, are relevant to the provision of financial product advice to retail clients and comply with the regulations, the benefits are not conflicted remuneration.

(3) Education or training activities for the professional development of the participants in the course must take up at least:

(a) 75% of the time spent on the course; or

(b) 6 hours a day;

whichever is the lesser.

(4) The participant, or the participant’s employer or licensee, must pay for the costs of:

(a) travel and accommodation relating to the course; and

(b) events and functions held in conjunction with the course.

Example: The cost of day trips or dinners.

(5) In this regulation:

education or training course includes a conference or seminar.

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.

(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.

(2) The benefit is not conflicted remuneration if the benefit:

(a) has a genuine education or training purpose; and

(b) is relevant to the carrying on of a financial services business; and

Subdivision 4A—Ban on conflicted remuneration (rebates)

7.7A.15AJ What Subdivision is about

(1) This Subdivision is made for the purposes of subsection 963N(1) of the Act.

(2) This Subdivision provides for a scheme under which a person (the covered person) covered by section 963M of the Act in relation to conflicted remuneration must pay amounts, or provide monetary benefits, based on that conflicted remuneration, to product holders mentioned in section 963N of the Act.

7.7A.15AK Obligations of covered person

(1) The covered person must pay amounts, or provide monetary benefits, to the product holders no later than 1 year after the day by which the covered person is legally obliged (disregarding Subdivision C of Division 4 of Part 7.7A of the Act) to give the conflicted remuneration to another person (see paragraph 963M(1)(a) of the Act).

(2) The amounts paid, or the amounts of the monetary benefit provided, to the product holders under subregulation (1) must be amounts that are just and equitable in the circumstances.

(3) For the purposes of subregulation (2), in determining whether an amount is just and equitable in the circumstances, take account of the following matters:

(a) the amount of the conflicted remuneration;

(b) the amount invested by each product holder in the financial products mentioned in subsection 963N(2) of the Act;

(d) the extent to which the sum of the amounts to be paid, and the amount of the monetary benefits to be provided, to the product holders under subregulation (2) equals the amount of, or the present value of, the conflicted remuneration;

(e) any other relevant matter.

(4) However, for the purposes of subregulation (2), in determining whether an amount is just and equitable in the circumstances, do not take account of the costs of the covered person in paying the amounts or providing the monetary benefits.

Subdivision 6—Application provisions relating to the Corporations Amendment (Life Insurance Remuneration Arrangements) Act 2017

7.7A.16G Definitions

In this Subdivision:

amending Act means the Corporations Amendment (Life Insurance Remuneration Arrangements) Act 2017.

commencement day means the day on which Schedule 1 to the Corporations Amendment (Life Insurance Remuneration Arrangements) Act 2017 commences.

7.7A.16H Life risk insurance products substantially related to existing products

(1) This regulation is made for the purposes of subsection 1549B(3) of the Act.

(2) The amendments made by Schedule 1 to the amending Act do not apply to a benefit given to a financial services licensee, or a representative of a financial services licensee, in relation to a life risk insurance product issued to a person on or after the commencement day (the post‑commencement product) if:

(a) the person held another life risk insurance product immediately before the commencement day (the pre‑commencement product); and

(b) either:

(i) the person acquires the post‑commencement product by exercising an option given to the person under the pre‑commencement product; or

(ii) the person acquires the post‑commencement product because the pre‑commencement product was cancelled due to an administrative error.

Subdivision 7—Asset‑based fees on borrowed amounts

7.7A.17 Financial services licensees

For subsection 964D(4) of the Act, a circumstance in which subsections 964D(1) and (2) of the Act do not apply is that the asset‑based fee being charged is a brokerage fee within the meaning of regulation 7.7A.12D.

7.7A.18 Authorised representatives

For subsection 964E(3) of the Act, a circumstance in which subsection 964E(1) of the Act does not apply is that the asset‑based fee being charged is a brokerage fee within the meaning of regulation 7.7A.12D.

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.

Part 7.8—Other provisions relating to conduct etc connected with financial products and financial services, other than financial product disclosure

Division 2—Dealing with clients’ money

Subdivision A—Money other than loans

7.8.01A Wholesale client money

For the purposes of paragraph 981A(4)(a) of the Act, money paid as mentioned in subsection 981A(1) of the Act is exempt from Subdivision A of Division 2 of Part 7.8 of the Act at a time if:

(a) at that time the licensee has the client’s written agreement to the money being dealt with other than in accordance with that Subdivision; and

Note 1: It is not necessary for the agreement to mention that Subdivision explicitly.

Note 2: If the licensee obtains the agreement after the money is paid, that Subdivision ceases to apply to the money when the licensee obtains the agreement.

(b) either:

(i) the financial service referred to in subparagraph 981A(1)(a)(i) of the Act is or relates to a dealing in a derivative; or

(ii) the financial product referred to in subparagraph 981A(1)(a)(ii) of the Act is a derivative; and

(d) the financial service or product would have been provided to the client as a wholesale client if:

(i) the service or product were provided to the client when the money was paid; and

(ii) section 761GA of the Act (about sophisticated investors) did not apply.

7.8.01 Obligation to pay money into an account

(1) For subparagraph 981B(1)(a)(i) of the Act, the reference in that subparagraph to an account with an Australian ADI does not prevent a financial services licensee that is an ADI from paying money into an account held by itself.

(2) For subparagraph 981B(1)(a)(ii) of the Act, the following accounts are prescribed:

(a) an account with an approved foreign bank;

(b) a cash management trust.

(3) For subparagraph 981B(1)(b)(iv) of the Act, if, in accordance with an agreement mentioned in paragraph 7.8.02(3)(a), a financial services licensee is required to pay an amount mentioned in subparagraph 7.8.02(3)(a)(iv), that amount is money which must be paid into an account to which that subparagraph applies.

(4) For subparagraph 981B(1)(b)(iv) of the Act:

(a) money paid to a financial services licensee:

(i) from or on behalf or an insured or intending insured for or on account of an insurer; and

(ii) in connection with a contract of insurance or proposed contract of insurance;

is money which may be paid into an account to which that subparagraph applies; and

(b) money paid to a financial services licensee from or on behalf of an insurer for or on account of an insured or intending insured is money which may be paid into an account to which that subparagraph applies.

(4A) For subparagraph 981B(1)(b)(iv) of the Act, if a financial services licensee is required, by the market integrity rules or the operating rules of a licensed market, to pay an amount into an account to which section 981B relates, the amount is money which may be paid into that account.

(5) For paragraph 981B(1)(c) of the Act, a financial services licensee must:

(a) operate an account to which that paragraph applies as a trust account; and

(b) designate the account to be a trust account; and

(c) hold all moneys paid into the account (other than moneys paid to the financial services licensee under the financial services licensee’s obligation to call margins from clients under the market integrity rules, the operating rules of a licensed market or the operating rules of a licensed CS facility) on trust for the benefit of the person who is entitled to the moneys.

(6) For subparagraph 981B(1)(b)(iv) of the Act, money received under section 1017E of the Act is money which may be paid into:

(a) an account to which section 981B relates; or

(b) an insurance broking account maintained under section 26 of the Insurance (Agents and Brokers) Act 1984.

(7) For paragraph 981B(1)(c) of the Act, if money received under section 1017E of the Act is paid into an account under subregulation (6), Part 7.8 of the Act applies to the money.

Note: See also subregulation 7.9.08(3).

(8) For paragraph 981B(1)(c) of the Act, if a financial services licensee is required to call margins from a client under the market integrity rules, the operating rules of a licensed market or the operating rules of a licensed CS facility:

(a) the financial services licensee may operate an account to which that paragraph applies as:

(i) a clients’ segregated account; or

(ii) a trust account;

in accordance with the operating rules or market integrity rules; and

(b) if:

(i) the account is operated outside Australia; and

(ii) the law in force in the jurisdiction where it is maintained requires the account to be designated in a particular way;

the financial services licensee must designate the account in that way.

Note: The operating rules or market integrity rules may require client moneys, including moneys used for margining, to be held in either a clients’ segregated account or a trust account.

(9) For subparagraph 981B(1)(b)(iv) of the Act, if an account is operated in accordance with subregulation (8), all money received by the financial services licensee under Subdivision A of Division 2 of Part 7.8 of the Act is money that may be paid into that account.

(10) Subregulation (8) does not affect the operation of section 981E of the Act.

(11) For subparagraph 981B(1)(b)(iv) of the Act, each of the following is money that may be paid into an account:

(a) mixed money;

(b) unidentified money.

(12) For paragraph 981B(1)(c) of the Act, if mixed money is paid into an account under subregulation (11), the licensee must, as soon as practicable, but within 1 month after the mixed money is paid into the account, remove from the account the part of the money that is not section 981B money.

(13) For paragraph 981B(1)(c) of the Act, if unidentified money is paid into an account under subregulation (11), the licensee must, as soon as practicable after the unidentified money is paid into the account:

(a) identify any part of the money that is section 981B money; and

(b) remove from the account any part of the money that is not section 981B money.

(14) For subregulations (11) to (13):

mixed money means money that:

(a) is received by the licensee as a single payment; and

(b) is not wholly section 981B money, but includes section 981B money.

section 981B money means:

(a) money to which Subdivision A of Division 2 of Part 7.8 of the Act applies; or

(b) money that is allowed to remain in the account because of the operation of subparagraphs 981B(1)(b)(ii) and (iii) of the Act; or

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

7.8.02 Accounts maintained for section 981B of the Act

Withdrawals from account

(1) For paragraph 981C(1)(a) of the Act, payments may be made out of an account maintained for section 981B of the Act in any of the following circumstances:

(a) making a payment to, or in accordance with the written direction of, a person entitled to the money (subject to regulation 7.8.02A);

(b) defraying brokerage and other proper charges;

(c) paying to the financial services licensee money to which the financial services licensee is entitled (subject to regulation 7.8.02A);

(d) making a payment of moneys due to an insurer in connection with a contract of insurance;

(e) making a payment that is otherwise authorised by law;

(f) paying to the financial services licensee money to which the financial services licensee is entitled pursuant to the market integrity rules or the operating rules of a licensed market.

(1A) For paragraph 981C(1)(a) and subparagraph 981B(1)(b)(iv) of the Act, if, under paragraph (1)(a), a financial services licensee (the paying licensee) withdraws money from an account maintained for section 981B of the Act and pays it to another financial services licensee (the receiving licensee):

(a) the paying licensee must ensure that the receiving licensee is notified, at the same time as the payment is made or as soon as practicable, that the money:

(i) has been withdrawn from an account of the paying licensee maintained for section 981B of the Act; and

(ii) should be paid into an account of the receiving licensee maintained for section 981B of the Act; and

(b) not later than the day after the receiving licensee receives the payment, the receiving licensee must pay the money into an account of the receiving licensee maintained for section 981B of the Act.

Permissible investments

(2) For paragraph 981C(1)(a) of the Act, and subject to subregulations (3), (4) and (5), the following kinds of investment may be made in relation to an account maintained for section 981B of the Act:

(a) investment in any manner in which trustees are for the time being authorised by law to invest trust funds;

(b) investment on deposit with an eligible money market dealer;

(d) the acquisition of cash management trust interests;

(e) investment in a security issued or guaranteed by the Commonwealth or a State or Territory;

(f) investment on deposit with a licensed CS facility.

(3) A financial services licensee must not invest an amount in a way permitted by subregulation (2) unless:

(a) the financial services licensee has obtained the client’s written agreement to the following matters:

(i) the making of the investment;

(ii) how earnings on the investment are to be dealt with (including whether or not the earnings are to be shared, and whether or not the earnings are to be paid into the account);

(iii) how the realisation of the investment is to be dealt with (including whether or not the capital invested, and the proceeds of the investment, are to be deposited into the account);

(iv) how any losses made on the investment are to be dealt with (including the circumstances in which the financial services licensee is required to pay an amount equal to the difference between the amount invested and the amount received, into the account or otherwise);

(v) the fee (if any) that the financial services licensee proposes to charge for the investment; and

(b) the money is money to which the client is entitled.

Note: The investment arrangement may be a managed investment scheme.

(4) For paragraph 981A(4)(a) of the Act, subregulation (3) does not apply to money to which subregulation 7.8.01(4) applies.

(5) In subregulation (2):

investment does not include the making of an investment in accordance with the specific direction of a client.

Note: Paragraph (1)(a) deals with the withdrawal of money from an account in accordance with the written direction of a person entitled to the money.

(6) For paragraph 981C(1)(b) of the Act, in relation to moneys received in relation to insurance products, the financial services licensee must ensure that:

(a) the balance of moneys in an account maintained by the financial services licensee under section 981B of the Act; and

(b) the total amount previously withdrawn from the account and currently invested under subregulation (2);

is at least the sum of:

(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:

(d) ending when the payment is actually made to the insurer;

whether or not the amount has been invested under subregulation (2).

(6B) For paragraph (6)(d), if, at a particular time, money received by a financial services licensee for or on account of an insured or intending insured as mentioned in paragraph 7.8.01(4)(b) is paid into an account, the insured or intending insured is taken to be entitled to receive payment of the amount throughout the period:

(a) beginning at that time; and

(b) ending when the payment is actually made to the insured or intending insured;

whether or not the amount has been invested under subregulation (2).

(6C) On application by a financial services licensee in the prescribed form, ASIC may consent in writing to the minimum balance of monies received in relation to insurance products being less than the level specified in subregulation (6).

(7) For paragraph 981C(1)(c) of the Act, if money is held in an account maintained for section 981B of the Act:

(a) the financial services licensee is entitled to the interest on the account; and

(b) the interest on the account is not required to be paid into the account;

only if the financial services licensee discloses to the client that the financial services licensee is keeping the interest (if any) earned on the account.

Interest and other earnings on investments

(8) For paragraph 981C(1)(d) of the Act, interest or other earnings on:

(a) an investment of money withdrawn from an account maintained for section 981B of the Act; or

(b) the proceeds of the realisation of such an investment;

must be dealt with in accordance with the written agreement between the financial services licensee and the client under subregulation (3).

7.8.02A Accounts maintained for the purposes of section 981B of the Act—special rules for retail clients

(1) Paragraph 7.8.02(1)(a) does not apply to a written direction to the extent the direction allows the financial services licensee to use derivative retail client money as mentioned in subregulation (3) of this regulation.

(2) Paragraph 7.8.02(1)(c) does not apply to an entitlement of the financial services licensee to use derivative retail client money as mentioned in subregulation (3) of this regulation.

(3) Subregulations (1) and (2) apply to using the money:

(a) as the licensee’s capital, including working capital; or

(b) for the purpose of meeting obligations incurred by the licensee other than on behalf of the client; or

(c) for the purpose of entering into, or meeting obligations under, transactions that the licensee enters into to hedge, counteract or offset the risk to the licensee associated with a transaction between the licensee and the client.

7.8.03 How money to be dealt with if licensee ceases to be licensed etc

(1) For paragraph 981F(a) of the Act, this regulation applies if a financial services licensee ceases to be licensed (including a cessation because the financial services licensee’s licence has been suspended or cancelled).

(2) For paragraph 981F(b) of the Act, this regulation applies if a financial services licensee:

(a) becomes insolvent under an administration; or

(b) is the subject of any of the following arrangements:

(i) the appointment of an administrator under section 436A, 436B or 436C of the Act;

(ii) the commencement of winding up;

(iii) the appointment of a receiver of property of the financial services licensee, whether by a court or otherwise;

(iv) the appointment of a receiver and manager of property of the financial services licensee, whether by a court or otherwise;

(v) entry into a compromise or arrangement with creditors of the financial services licensee, or a class of creditors;

(vi) if the financial services licensee is deceased—administration of the estate of the financial services licensee under Part XI of the Bankruptcy Act 1966;

(vii) if the financial services licensee is deceased—administration of the estate of the financial services licensee under the law of an external Territory that provides for the administration of the insolvent estate of a deceased person;

(viii) an arrangement under the law of a foreign country that provides for a matter mentioned in subparagraphs (i) to (vii).

(3) For paragraph 981F(d) of the Act, this regulation applies if:

(a) a financial services licensee ceases to carry on a particular activity authorised by the financial services licence; and

(b) money is paid in connection with that activity.

(4) For each person who is entitled to be paid money from an account of the financial services licensee maintained for section 981B of the Act, the account is taken to be subject to a trust in favour of the person.

(5) If money in an account of the financial services licensee maintained for section 981B of the Act has been invested, for each person who is entitled to be paid money from the account, the investment is taken to be subject to a trust in favour of the person.

(6) Money in the account of the financial services licensee maintained for section 981B of the Act is to be paid as follows:

(a) the first payment is of money that has been paid into the account in error;

(b) if money has been received on behalf of insureds in accordance with a contract of insurance, the second payment is payment to each insured person who is entitled to be paid money from the account, in the following order:

(i) the amounts that the insured persons are entitled to receive from the moneys in the account in respect of claims that have been made;

(ii) the amounts that the insured persons are entitled to receive from the moneys in the account in respect of other matters;

(i) paragraph (b) has been complied with; or

(ii) paragraph (b) does not apply;

the next payment is payment to each person who is entitled to be paid money from the account;

(d) if the money in the account is not sufficient to be paid in accordance with paragraph (a), (b) or (c), the money in the account must be paid in proportion to the amount of each person’s entitlement;

(e) if there is money remaining in the account after payments made in accordance with paragraphs (a), (b) and (c), the remaining money is taken to be money payable to the financial services licensee.

(7) This regulation applies despite anything to the contrary in the Bankruptcy Act 1966 or a law relating to companies.

7.8.04 Money to which Subdivision A of Division 2 of Part 7.8 of the Act applies taken to be held in trust: breach of financial services law

For paragraph 981H(3)(b) of the Act, if client money is held by an investment mentioned in subregulation 7.8.02(5) following a breach of a financial services law:

(a) the money is subject to a trust in favour of the client to the extent that the client is entitled to the money; and

(b) any investment of the money is subject to a trust in favour of the client to the extent that the client is entitled to the investment; and

(c) the proceeds of a realisation of an investment of the money are subject to a trust in favour of the client to the extent that the client is entitled to the proceeds.

7.8.05 Money to which Subdivision A of Division 2 of Part 7.8 of the Act applies taken to be held in trust: risk accepted by insurer

(1) For paragraph 981H(3)(b) of the Act, this regulation applies if, in relation to an insurance product:

(a) a financial services licensee is holding money to which Subdivision A of Division 2 of Part 7.8 of the Act applies; and

(b) the risk in relation to the insurance product has been accepted by an insurer.

(2) The financial services licensee holds the money on trust for the insurer in accordance with Division 2 of Part 7.8 of the Act, subject to the agreement of the insurer.

(3) This regulation does not affect the operation of regulations 7.8.03 and 7.8.08.

(4) For paragraph 981C(1)(c) of the Act, if money to which this regulation applies is held in an account maintained for section 981B of the Act:

(a) the financial services licensee is entitled to the interest on the account; and

(b) the interest on the account is not required to be paid into the account.

Subdivision AA—Client money reporting rules

7.8.05A Definitions for Subdivision AA of Division 2

In this Subdivision:

client money reporting infringement notice means an infringement notice given under regulation 7.8.05C.

client money reporting infringement notice period has the meaning given by subregulation 7.8.05H(2).

recipient, in relation to a client money reporting infringement notice, means the person to whom ASIC gives the infringement notice, or intends to give the infringement notice, under regulation 7.8.05C.

7.8.05B Enforceable undertakings

(1) For the purposes of paragraph 981N(1)(d) of the Act, ASIC may accept a written undertaking, given by a person who is alleged to have contravened subsection 981M(1) of the Act, as an alternative to civil proceedings.

(2) Without limiting subregulation (1), ASIC may accept an undertaking that includes any of the following:

(a) an undertaking to take specified action within a specified period;

(b) an undertaking to refrain from taking specified action;

(c) an undertaking to pay a specified amount within a specified period to the Commonwealth or to some other specified person.

Note: An undertaking may relate to a client money reporting infringement notice given in relation to the alleged contravention. For example, an infringement notice may require a person to give an undertaking, a person may give an undertaking to comply with an infringement notice or a person may give an undertaking if the person does not comply with an infringement notice or if the infringement notice is withdrawn.

(3) If ASIC agrees, in writing, to the withdrawal or variation of the undertaking, the person who gave the undertaking may withdraw or vary the undertaking.

(4) If ASIC is satisfied that the person who gave the undertaking has breached a term of the undertaking, ASIC may apply to a Court for an order under subregulation (5).

(5) If the Court is satisfied that the person has breached a term of the undertaking, the Court may make one or more of the following orders:

(a) an order directing the person to comply with the term of the undertaking;

(b) an order directing the person to pay to the Commonwealth an amount not exceeding the amount of any financial benefit that the person has obtained directly or indirectly and that is reasonably attributable to the breach;

(c) an order directing the person to compensate another person who has suffered loss or damage as a result of the breach;

(d) any other order that the Court considers appropriate.

(6) This regulation does not affect the liability of a person to civil proceedings if ASIC does not accept an undertaking in relation to the alleged contravention referred to in subregulation (1).

7.8.05C Client money reporting infringement notices

(1) This regulation is made for the purposes of subsection 981N(1) of the Act.

(2) If ASIC has reasonable grounds to believe that a person has contravened subsection 981M(1) of the Act, ASIC may give the person an infringement notice (a client money reporting infringement notice) in relation to the alleged contravention.

(3) A client money reporting infringement notice may relate to one or more alleged contraventions of a client money reporting rule.

(4) If ASIC withdraws a client money reporting infringement notice given to a person in relation to an alleged contravention of a client money reporting rule, ASIC may give the person a new infringement notice in relation to the alleged contravention.

Example: A client money reporting infringement notice given to a person in relation to an alleged contravention of a client money reporting rule may be withdrawn, and a new infringement notice given to the person in relation to that alleged contravention, if the original infringement notice contained an error.

7.8.05D Effect of client money reporting infringement notice provisions

(1) Regulations 7.8.05C to 7.8.05Q do not require ASIC to give a client money reporting infringement notice to a person in relation to an alleged contravention of a client money reporting rule.

(2) Regulations 7.8.05C to 7.8.05Q do not affect the liability of a person to civil proceedings if ASIC does not give a client money reporting infringement notice to the person in relation to an alleged contravention of a client money reporting rule.

(3) Regulations 7.8.05C to 7.8.05Q do not affect the liability of a person to civil proceedings if:

(a) ASIC gives a client money reporting infringement notice to the person in relation to an alleged contravention of a client money reporting rule; and

(b) either:

(i) the infringement notice is withdrawn; or

(ii) the person does not comply with the infringement notice in accordance with regulation 7.8.05H.

(4) Regulations 7.8.05C to 7.8.05Q do not limit or otherwise affect the penalty that a Court could impose on the person for a contravention of a client money reporting rule.

7.8.05E Statement of reasons must be given

(1) Before giving a recipient a client money reporting infringement notice, ASIC must:

(a) give the recipient a written statement that sets out ASIC’s reasons for believing that the recipient has contravened a client money reporting rule; and

(b) give the recipient, or a representative of the recipient, an opportunity to:

(i) appear at a private hearing before ASIC; and

(ii) give evidence to ASIC; and

(iii) make submissions to ASIC;

in relation to the alleged contravention of the client money reporting rule.

(2) If a recipient, or a representative of a recipient, gives ASIC evidence or information under paragraph (1)(b) in relation to the alleged contravention of a client money reporting rule, the evidence or information is not admissible in evidence in any proceedings against the recipient, other than proceedings relating to the evidence or information being false or misleading.

7.8.05F Contents of client money reporting infringement notice

A client money reporting infringement notice:

(a) must state the date on which it is given; and

(b) must be identified by a unique code; and

(d) must state that it is being given by ASIC under regulation 7.8.05C; and

(e) must specify details of each alleged contravention of a client money reporting rule to which the infringement notice relates, including:

(i) the conduct that made up each alleged contravention (including, to the extent known, the date on which it occurred and the place at which it occurred); and

(ii) each client money reporting rule that ASIC alleges the recipient has contravened; and

(f) must, in relation to each client money reporting rule to which the infringement notice relates, state the maximum pecuniary penalty that a Court could order the recipient to pay for contravening the rule; and

(g) must, in relation to each alleged contravention of a client money reporting rule to which the infringement notice relates:

(i) specify the penalty (if any) payable for the alleged contravention; and

(ii) specify the remedial measures (if any) that the recipient must undertake or institute; and

(iii) specify the sanctions (if any) that the recipient must accept; and

(iv) specify the terms of an undertaking (if any) that the recipient must give under regulation 7.8.05B; and

(h) if one or more penalties are specified in the infringement notice—must:

(i) specify the total penalty that the recipient must pay to the Commonwealth; and

(ii) state that the penalty is payable to ASIC on behalf of the Commonwealth; and

(iii) explain how the penalty can be paid; and

(i) must state that the recipient may choose not to comply with the infringement notice, but that if the recipient does not comply, civil proceedings may be brought against the recipient in relation to the alleged contravention; and

(j) must explain what the recipient must do to comply with the infringement notice and the effect of compliance with the infringement notice; and

(k) must state that the recipient may apply to ASIC:

(i) for withdrawal of the notice under regulation 7.8.05L; or

(ii) for an extension of time under regulation 7.8.05J; and

(l) must state that ASIC may publish details of the infringement notice under regulation 7.8.05Q; and

(m) may include any other information that ASIC considers necessary.

Note: For the purposes of subparagraph (h)(i), the total penalty is the sum of the penalties payable under subparagraph (g)(i).

7.8.05G Amount of penalty payable to the Commonwealth

(1) The penalty payable for an alleged contravention of a client money reporting rule is the amount determined by ASIC (which may be nil), subject to subsection 981N(2) of the Act.

Note: See subsection 981N(2) of the Act for the maximum penalty payable.

(2) If a client money reporting infringement notice relates to more than one alleged contravention, the total penalty payable under the infringement notice is the sum of the penalties (if any) payable for the alleged contraventions.

7.8.05H Compliance with client money reporting infringement notice

(1) A recipient complies with a client money reporting infringement notice if, during the client money reporting infringement notice period, the recipient does all of the following:

(a) pays the total penalty specified in the infringement notice under subparagraph 7.8.05F(h)(i) (if any);

(b) undertakes or institutes the remedial measures specified in the infringement notice under subparagraph 7.8.05F(g)(ii) (if any);

(d) gives an undertaking (including an undertaking to comply with the infringement notice) with the terms specified in the infringement notice under subparagraph 7.8.05F(g)(iv) (if any).

(2) The client money reporting infringement notice period for a client money reporting infringement notice:

(a) starts on the day on which the infringement notice is given to the recipient; and

(b) ends:

(i) 27 days after the day on which the infringement notice is given to the recipient; or

(ii) on another day permitted by this regulation.

(3) If the recipient applies for a further period of time in which to comply with the client money reporting infringement notice, and the application is granted, the client money reporting infringement notice period ends at the end of the further period allowed.

(4) If the recipient applies for a further period of time in which to comply with the client money reporting infringement notice, and the application is refused, the client money reporting infringement notice period ends on the later of:

(a) 28 days after the day on which the infringement notice was given to the recipient; and

(b) 7 days after the notice of refusal is given to the recipient.

(5) If the recipient applies for the client money reporting infringement notice to be withdrawn, and the application is refused, the client money reporting infringement notice period ends 28 days after the notice of refusal is given to the recipient.

7.8.05J Extension of client money reporting infringement notice period

(1) During the client money reporting infringement notice period, a recipient may apply, in writing, to ASIC for a further period of no more than 28 days in which to comply with the client money reporting infringement notice.

(2) The application must:

(a) specify the client money reporting infringement notice’s unique identification code; and

(b) set out the reasons for the application.

(3) Within 14 days after receiving the application, ASIC must:

(a) grant or refuse a further period no longer than the period sought (and no longer than 28 days); and

(b) notify the recipient in writing of the decision and, if the decision is a refusal, the reasons for the decision.

(4) If ASIC refuses a further period under paragraph (3)(a), the recipient may not make a further application under subregulation (1) in relation to that client money reporting infringement notice.

(5) If ASIC does not grant or refuse a further period under paragraph (3)(a) within 14 days after receiving the application, ASIC is taken to have refused a further period.

7.8.05K Effect of compliance with client money reporting infringement notice

(1) Subject to subregulation (3), if:

(a) a client money reporting infringement notice is given to a recipient in relation to an alleged contravention of a client money reporting rule; and

(b) the infringement notice is not withdrawn; and

the effects in subregulation (2) apply.

(2) The effects are:

(a) any liability of the recipient to the Commonwealth for the alleged contravention of the client money reporting rule is discharged; and

(b) no civil or criminal proceedings may be brought or continued by the Commonwealth against the recipient for the conduct specified in the client money reporting infringement notice as being the conduct that made up the alleged contravention of the client money reporting rule or rules; and

(c) no administrative action may be taken by ASIC under section 914A, 915B, 915C or 920A of the Act against the recipient for the conduct specified in the infringement notice as being the conduct that made up the alleged contravention of the client money reporting rule; and

(d) the recipient is not taken to have admitted guilt or liability in relation to the alleged contravention; and

(e) the recipient is not taken to have contravened the client money reporting rule.

Note: Third parties are not prevented from commencing civil proceedings against the recipient, including under section 1101B of the Act. ASIC is not prevented from applying for an order on behalf of a plaintiff in accordance with the Act.

(3) Subregulation (2) does not apply if the recipient has knowingly:

(a) provided false or misleading information to ASIC; or

(b) withheld evidence or information from ASIC;

in relation to the alleged contravention of the client money reporting rule.

7.8.05L Application to withdraw client money reporting infringement notice

(1) During the client money reporting infringement notice period, a recipient of a client money reporting infringement notice may apply, in writing, to ASIC for the infringement notice to be withdrawn.

(2) The application must:

(a) specify the client money reporting infringement notice’s unique identification code; and

(b) set out the reasons for the application.

(3) Within 14 days after receiving the application, ASIC must:

(a) withdraw or refuse to withdraw the client money reporting infringement notice; and

(b) notify the recipient in writing of the decision and, if the decision is a refusal, the reasons for the decision.

(4) In deciding whether to withdraw the client money reporting infringement notice, ASIC may take the following matters into account:

(a) whether the recipient has previously been found to have contravened subsection 981M(1) of the Act;

(b) the circumstances in which the contravention set out in the infringement notice is alleged to have occurred;

(c) whether an infringement notice has previously been given to the recipient in relation to an alleged contravention of subsection 981M(1) of the Act, and whether the recipient complied with the infringement notice;

(d) any other relevant matters.

(5) If ASIC refuses to withdraw the client money reporting infringement notice, the recipient may not make a further application under subregulation (1) in relation to that infringement notice.

(6) If ASIC has not withdrawn, or refused to withdraw, the client money reporting infringement notice within 14 days after receiving the application, ASIC is taken to have refused to withdraw the infringement notice.

7.8.05M Withdrawal of client money reporting infringement notice by ASIC

(1) ASIC may withdraw a client money reporting infringement notice given by ASIC without an application under regulation 7.8.05L having been made.

(2) In deciding whether to withdraw a client money reporting infringement notice under this regulation, ASIC may take the matters referred to in subregulation 7.8.05L(4) into account.

7.8.05N Notice of withdrawal of client money reporting infringement notice

(1) A notice withdrawing a client money reporting infringement notice must include the following information:

(a) the name and address of the recipient;

(b) the date the infringement notice was given;

(2) The notice must also state that the client money reporting infringement notice is withdrawn.

7.8.05P Withdrawal of notice after compliance

(1) ASIC may withdraw a client money reporting infringement notice after the recipient has complied with the infringement notice only if the recipient agrees, in writing, to the withdrawal.

(2) If a client money reporting infringement notice is withdrawn after the penalty specified in it (if any) has been paid, the Commonwealth must refund the amount of the penalty to the person who paid it.

(3) If a client money reporting infringement notice is withdrawn after the recipient has complied with a requirement specified in the infringement notice:

(a) to undertake or institute remedial measures; or

(b) to accept sanctions other than a payment of a penalty to the Commonwealth; or

the remedial measures, sanctions or undertaking are taken to no longer be enforceable by ASIC.

7.8.05Q Publication of details of client money reporting infringement notice

(1) If ASIC gives a client money reporting infringement notice to a recipient, ASIC may, at the end of the client money reporting infringement notice period, publish details of the infringement notice.

(2) If ASIC decides to publish details of the client money reporting infringement notice, ASIC must publish the details in accordance with either or both of subregulations (3) and (4).

(3) ASIC may publish details of a client money reporting infringement notice by publishing in the Gazette:

(a) a copy of the infringement notice; and

(b) a statement as to whether the recipient has complied with the infringement notice; and

(i) compliance is not an admission of guilt or liability; and

(ii) the recipient is not regarded as having contravened a client money reporting rule; and

(d) if the recipient has not complied with the infringement notice—a statement that:

(i) the giving of an infringement notice to a recipient is only an allegation that the recipient has contravened a client money reporting rule; and

(ii) the recipient is not regarded as having contravened the client money reporting rule or rules specified in the infringement notice.

(4) ASIC may publish details of a client money reporting infringement notice by issuing a written or oral statement that includes:

(a) an accurate summary of the details of the infringement notice, including:

(i) the name of the recipient; and

(ii) the amount of the penalty specified in the infringement notice (if any); and

(iii) the remedial measures specified in the infringement notice (if any); and

(iv) the sanctions specified in the infringement notice (if any); and

(v) the terms of an undertaking specified in the infringement notice (if any); and

(vi) the conduct specified in the infringement notice as being the conduct that made up the alleged contravention; and

(b) a statement as to whether the recipient has complied with the infringement notice; and

(i) compliance is not an admission of guilt or liability; and

(ii) the recipient is not regarded as having contravened a client money reporting rule; and

(d) if the recipient has not complied with the infringement notice—a statement that:

(i) the giving of an infringement notice to a recipient is only an allegation that the recipient has contravened a client money reporting rule; and

(ii) the recipient is not regarded as having contravened the client money reporting rule or rules specified in the infringement notice.

Subdivision B—Loan money

7.8.06 Statement setting out terms of loan etc

For subsection 982C(1) of the Act, the financial services licensee must give a client a disclosure document that contains, as far as practicable, the matters required for Division 2 of Part 7.9 of the Act.

Division 3—Dealing with other property of clients

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

For paragraph 984A(2)(a) of the Act, property given as security for a standard margin lending facility is exempt from Division 3 of Part 7.8 of the Act.

Note: Paragraph 984A(2)(a) of the Act provides that the regulations may exempt property given in specified circumstances from some or all of the provisions of Division 3 of Part 7.8 of the Act.

7.8.06B Wholesale client property

For the purposes of paragraph 984A(2)(a) of the Act, property given as mentioned in subsection 984A(1) of the Act is exempt from Division 3 of Part 7.8 of the Act at a time if:

(a) at that time the licensee has the client’s written agreement to the property being dealt with other than in accordance with that Division; and

Note 1: It is not necessary for the agreement to mention that Division explicitly.

Note 2: If the licensee obtains the agreement after the property is given, that Division ceases to apply to the property when the licensee obtains the agreement.

(b) either:

(i) the financial service referred to in subparagraph 984A(1)(a)(i) of the Act is or relates to a dealing in a derivative; or

(ii) the financial product referred to in subparagraph 984A(1)(a)(ii) of the Act is a derivative; and

(d) the financial service or product would have been provided to the client as a wholesale client if:

(i) the service or product were provided to the client when the property was given; and

(ii) section 761GA of the Act (about sophisticated investors) did not apply.

7.8.07 How property to which Division 3 of Part 7.8 of the Act to be dealt with

(1) For paragraph 984B(1)(a) of the Act, this regulation sets out requirements in relation to property to which Division 3 of Part 7.8 of the Act applies.

(2) The financial services licensee must hold the property on trust for the benefit of the person who is entitled to it.

(3) If the client requests the financial services licensee, in writing, to deposit the property in safe custody with an ADI:

(a) the licensee must deposit the property; or

(b) if the licensee does not comply with the request for any reason, the licensee must notify the client, as soon as practicable, of the failure to comply with the request.

(4) If the client requests the financial services licensee, in writing, to deposit the property in safe custody with a financial services licensee that provides a custodial or depositary service:

(a) the licensee must deposit the property; or

(b) if the licensee does not comply with the request for any reason, the licensee must notify the client, as soon as practicable, of the failure to comply with the request.

(5) If the client requests the financial services licensee, in writing, to deposit the property in safe custody in the place where the property was deposited with, or received by, the licensee:

(a) the licensee must deposit the property in accordance with the request; and

(b) if the licensee does not comply with the request for any reason, the licensee must notify the client, as soon as practicable, of the failure to comply with the request.

(6) If the client requests that the body corporate that issued or made available the securities, managed investment products or foreign passport fund products underlying the property register the property in the name of a nominee controlled by the financial services licensee, the financial services licensee must arrange for the body corporate to register the securities, managed investment products or foreign passport fund products in that way.

(7) If:

(a) none of subsections (3) to (6) applies; and

(b) the property is not registered in the client’s name by the body corporate that issued or made available the securities, managed investment products or foreign passport fund products underlying the property;

the financial services licensee must arrange to have the property registered in the client’s name.

(8) A financial services licensee must not deposit property as security for a loan or advance to the financial services licensee unless:

(a) the client owes the financial services licensee an amount in connection with a transaction entered into by the financial services licensee on the client’s behalf; and

(b) the financial services licensee gives the client a written notice that identifies the property and states that the dealer proposes to deposit it as security for a loan or advance to the financial services licensee; and

(c) the amount, or total of the amounts, that the client owes on the day of the deposit is at least the amount of the loan or advance.

(9) If a financial services licensee deposits property as security for a loan or advance to the financial services licensee, in accordance with subregulation (8):

(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.

Division 4—Special provisions relating to insurance

7.8.08 Debts of financial services licensee in relation to premiums etc

(1) Subregulations (2) to (4) apply if:

(a) money is received by a financial services licensee:

(i) from, or on behalf of, an insured or intending insured, or from another financial services licensee on behalf of an insured or intending insured; and

(ii) as a premium or an instalment of a premium in connection with a contract of insurance or a proposed contract of insurance; and

(b) the risk, or a part of the risk, to which the contract or proposed contract relates is accepted by or on behalf of an insurer; and

(c) the financial services licensee who so received the money is informed of, or otherwise ascertains, the amount of the premium or instalment to be paid.

(2) The financial services licensee who received the money must pay to the insurer an amount equal to the amount of the premium or instalment to be paid:

(a) in the period of 90 days (the relevant period) after:

(i) the day on which the cover provided by the insurer under the contract starts to have effect; or

(ii) the first day of the period to which the instalment relates; or

(b) if it is not practicable for the financial services licensee to pay the amount in the relevant period—as soon as practicable after the end of that period.

(3) If the financial services licensee has not received the amount of the premium, or of an instalment of the premium, payable in respect of a contract of insurance at the end of the relevant period, the financial services licensee must notify the insurer in writing, not later than 7 days after the end of the relevant period, that the financial services licensee has not received the amount.

(4) Subregulation (3) does not apply if the financial services licensee receives the amount:

(a) in the period of 7 days mentioned in subregulation (3); and

(b) before notifying the insurer in accordance with subregulation (3).

(5) Subregulations (6) and (7) apply if:

(a) a financial services licensee receives money from, or on behalf of:

(i) an insured or intending insured; or

(ii) another financial services licensee on behalf of an insured or intending insured;

as a premium or an instalment of a premium in connection with a contract of insurance or a proposed contract of insurance; and

(b) the risk, or a part of the risk, to which the contract or proposed contract relates is accepted by or on behalf of an insurer; and

(c) the financial services licensee who received the money has not been informed of, and has not otherwise ascertained, the amount of the premium or instalment to be paid.

(6) The financial services licensee who received the money must pay the amount mentioned in subregulation (7) to the insurer:

(a) in the period of 90 days (the relevant period) after:

(i) the day on which the cover provided by the insurer under the contract starts to have effect; or

(ii) the first day of the period to which the instalment relates; or

(b) if it is not practicable for the financial services licensee to pay the amount in the relevant period—as soon as practicable after the end of that period.

(7) For subregulation (6), the amount is:

(a) for a new contract of insurance, an amount not less than the lesser of:

(i) the amount of the money received; or

(ii) 75% of the amount fairly estimated by the financial services licensee to be the premium or instalment that is to be paid; and

(b) for a renewal of a contract of insurance, an amount not less than the lesser of:

(i) the amount of the money so received; or

(ii) 75% of the previous year’s premium for the risk, or of the last instalment of that years premium.

(8) Subregulation (9) applies if:

(a) the risk, or a part of the risk, to which a contract of insurance or a proposed contract of insurance relates is accepted by or on behalf of an insurer; and

(b) the contract of insurance or proposed contract of insurance has been, or is being, arranged or effected by a financial services licensee (licensee 1), either directly or through another financial services licensee; and

(c) licensee 1 has not been informed of, and has not otherwise ascertained, the amount of a premium or of an instalment of a premium to be paid in connection with the contract or proposed contract.

(9) Licensee 1 must, notify the insurer in writing, within 10 days after the day on which the risk, or that part of the risk, was accepted, that:

(a) the risk, or that part of the risk, has been accepted; and

(b) licensee 1 does not know the amount of the premium or instalment to be paid;

unless licensee 1 is informed of, or otherwise ascertains, the amount of the premium or instalment to be paid before notifying the insurer.

(10) Nothing in this regulation prevents:

(a) an insurer from making a contract or arrangement with a financial services licensee providing for the financial services licensee to pay an amount to the insurer before the time by which the financial services licensee is required by the provision concerned to pay that amount to the insurer; or

(b) an insurer from authorising a financial services licensee in writing to pay on behalf of the insurer, out of the money received by the financial services licensee as a premium or instalment of a premium in respect of a contract of insurance arranged with the insurer, any charges required by law to be paid by the insurer in respect of the contract; or

(c) a financial services licensee from exercising any legal right available to the financial services licensee to deduct from any moneys payable by the financial services licensee to the insurer any remuneration payable by the insurer to the financial services licensee in relation to a contract of insurance.

(11) For subregulation (1) or (5), if the risk, or a part of the risk, to which a contract or proposed contract mentioned in that subregulation is accepted on behalf of an insurer by an insurance intermediary other than the insurance financial services licensee who received the moneys from or on behalf of the insured or intending insured, the payment of the premium, or part of the premium, by the financial services licensee to the intermediary is taken to be a payment of the premium or part of the premium by the financial services licensee to the insurer.

(12) For subregulation (3) or (8), if:

(a) a financial services licensee is required to notify an insurer in accordance with that subregulation; and

(b) an insurance intermediary other than the financial services licensee has accepted the risk, or a part of the risk, to which the contract or proposed contract relates on behalf of the insurer;

a notification by the financial services licensee to the intermediary is taken to be a notification by the financial services licensee to the insurer.

(13) Subregulations (14) and (15) apply if:

(a) a financial services licensee receives money from, or on behalf of, an insured or intending insured in connection with a contract of insurance or proposed contract of insurance; and

(b) at the end of 30 days after the day on which the money was received, the risk, or a part of the risk, to which the contract or proposed contract relates has not been accepted.

(14) If the risk has not been accepted, the financial services licensee must, within 7 days after the end of the 30 day period:

(a) give notice to the insured or intending insured, in a form (if any) approved by ASIC for this paragraph, that the risk has not been accepted; and

(b) return the money to the insured or intending insured.

(15) If a part of the risk to which the contract or proposed contract relates has not been accepted, the financial services licensee must, within 7 days after the end of the 30 day period:

(a) give notice to the insured or intending insured, in a form (if any) approved by ASIC for this paragraph, of the extent to which the risk has not been accepted; and

(b) return that part of the money that relates to the part of the risk that has not been accepted to the insured or intending insured.

(16) If a financial services licensee receives money from, or on behalf of, an insurer for payment to, or on behalf of, an insured, the financial services licensee must pay an amount equal to the money to, or on behalf of, the insured:

(a) within 7 days after the day on which the financial services licensee received the money; or

(b) if it is not practicable for the financial services licensee to pay the amount in that period—as soon as practicable after the end of the period.

(17) Nothing in subregulation (16) prevents:

(a) an insured from making a contract or arrangement with an insurance financial services licensee providing for the financial services licensee to pay an amount mentioned in that subregulation to or on behalf of the insured before the time by which the financial services licensee is required by that subregulation to pay that amount to or on behalf of the insured; or

(b) a financial services licensee from exercising any legal right available to the financial services licensee to deduct from an amount payable by the financial services licensee to the insured any money payable by the insured to the financial services licensee in connection with a contract of insurance.

(18) A person is guilty of an offence if the person contravenes subregulation (2), (3), (6), (9), (14) or (16), whether or not it was done with the consent of the insurer or of the insured or intending insured.

Penalty:

(a) for an individual—20 penalty units; and

(b) for a body corporate—200 penalty units.

(19) Subregulation (18) does not apply if the person has a reasonable excuse.

Note: A defendant bears an evidential burden in relation to the matter in subregulation (18) (see subsection 13.3(3) of the Criminal Code).

(20) Strict liability applies to subregulation (18).

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

(21) If:

(a) under subregulation (2), (3), (6) or (9), a financial services licensee is required to pay an amount to, or to notify, an insurer; and

(b) under the contract or proposed contract of insurance concerned the insurer is an underwriting member of Lloyd’s;

it is sufficient compliance with the subregulation if the financial services licensee pays the amount to, or notifies, as the case may be, the Lloyd’s broker concerned.

Division 4A—Special provisions relating to margin lending facilities

Subdivision A—Responsible lending conduct for margin lending facilities

7.8.08A Limit of margin lending facility taken to be increased

(1) For paragraph 985E(3)(a) of the Act, the limit of a margin lending facility is taken to be increased, despite subsection 985E(2) of the Act, if:

(a) the increase is a result of a contribution of further secured property or transferred securities that occurs without the prior knowledge or agreement of the provider; and

(b) the provider permits the increase to continue; and

(2) If the limit of a margin lending facility is taken to be increased in the circumstances mentioned in subregulation (1), subsection 985E(1) of the Act is modified by omitting ‘before the critical day:’ and inserting ‘after the critical day:’.

Note: Paragraph 992C(1)(c) of the Act provides that the regulations may provide that Part 7.8 of the Act applies as if specified provisions were omitted, modified or varied as specified in the regulations.

(3) For subregulation (1), if:

(a) more than one contribution of further secured property or transferred securities under the margin lending facility occurs on a day; and

(b) each of the contributions is taken to increase the limit of the facility; and

(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

(b) the provider must ensure that the increase does not continue unless paragraph (a) permits it.

If facility assessed as unsuitable

(6) If:

(a) the limit of a margin lending facility is taken to be increased in the circumstances mentioned in subregulation (1); and

(b) the assessment made in accordance with section 985F of the Act assesses that the facility is unsuitable for the client because of the increased limit;

the limit is taken to be reduced to the limit of the margin lending facility before the increase, and the provider must ensure that the limit is reduced within 90 days of the day the assessment is made.

Facility not unsuitable for subsection 985K(4) of the Act

(7) For subsection 985K(4) of the Act, a margin lending facility is taken not to be unsuitable if:

(a) the limit of the margin lending facility is taken to be increased in the circumstances mentioned in subregulation (1); and

(b) the assessment made in accordance with section 985F of the Act assesses that the facility:

(i) is not unsuitable for the client; or

(ii) is unsuitable for the client because of the increased limit; and

(c) in the case of subparagraph (b)(ii), the provider ensures that the limit is reduced, within 90 days of the day the assessment is made, to the limit of the margin lending facility before the increase.

7.8.08B Exemption from requirement to make unsuitability assessment

(1) For paragraph 992C(1)(a) of the Act, a person is exempt from the requirement in paragraph 985E(1)(c) of the Act to make an assessment if the margin lending facility mentioned in paragraph 985E(1)(a) or (b) of the Act is a facility mentioned in subregulation (2):

(a) in respect of the full amount of the loan, including any interest, fees and charges; and

(b) in relation to which the client has not taken out a loan to fund the secured property contributed by the client for establishing the margin lending facility.

(2) For subregulation (1), the facility is a standard margin lending facility 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

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).

7.8.09A Modification of section 985G of the Act

For paragraph 992C(1)(c) of the Act, Part 7.8 of the Act applies as if section 985G of the Act were modified by inserting after subsection (2) the following subsection:

‘(2A) The regulations may provide that ASIC may specify in a legislative instrument matters ASIC considers to be relevant for the purposes of paragraph 985G(1)(c) of the Act.’

7.8.10 Circumstances in which margin lending facility is unsuitable

For paragraph 985H(2)(b) of the Act, a margin lending facility, or a margin lending facility whose limit is proposed to be increased, 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.

Division 6—Financial records, statements and audit

Subdivision B—Financial records of financial services licensees

7.8.11 Particular categories of information to be shown in records

For paragraph 988E(g) of the Act, the following matters are specified:

(a) all underwriting transactions entered into by the financial services licensee;

(b) all financial products dealt with by the licensee under instructions from another person;

(d) all property:

(i) that is not the property of the financial services licensee; and

(ii) for which the financial services licensee, or a nominee controlled by the financial services licensee, is accountable;

(e) each person by whom, or for whom, property mentioned in paragraph (d) is held;

(f) the extent to which property mentioned in paragraph (d) is:

(i) held in safe custody; or

(ii) deposited with a third party as security for a loan or advance made to the financial services licensee;

(g) all transactions in relation to insurance products entered into with, or on behalf of, foreign insurers.

7.8.11A Particular categories of information to be shown in records: records of non‑monetary benefit that is not conflicted remuneration

(1) This regulation is made for paragraph 988E(g) and section 988F of the Act.

(2) The following table sets out matters in relation to a non‑monetary benefit that:

(a) is given to a financial services licensee or a representative of a financial services licensee; and

(b) either:

(i) is not conflicted remuneration in accordance with paragraph 963C(b) of the Act, and is over $100; or

(ii) is not conflicted remuneration in accordance with paragraph 963C(c) or (d) of the Act; or

Note: Particulars of the matters must be shown in the records kept by the financial services licensee.

Item	Matter
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.

7.8.11B Information to be shown in records: records of rebates in relation to conflicted remuneration

(1) For the purposes of paragraph 988E(g) of the Act, the following matters are specified in relation to records that must be kept by a financial services licensee who is a person covered by section 963M of the Act:

(a) all conflicted remuneration that the financial services licensee is legally obliged (disregarding Subdivision C of Division 4 of Part 7.7A of the Act) to give another person for a financial year;

(b) all amounts that the financial services licensee is required by regulation 7.7A.15AK to pay, and all monetary benefits that the financial services licensee is required by that regulation to provide, for a financial year, and the following:

(i) all such amounts paid, and all such monetary benefits provided, by the financial services licensee for the financial year;

(ii) all cases where the financial services licensee determined that an amount that was just and equitable in the circumstances for the purposes of subregulation 7.7A.15AK(2) was nil.

(2) For the purposes of section 988F of the Act, subregulation (3) sets out additional requirements for things to be contained in records, and relating to the level of detail to be shown in records, that are imposed in relation to records that must be kept by a financial services licensee who is a person covered by section 963M of the Act, for:

(a) all amounts that the financial services licensee is required by regulation 7.7A.15AK to pay, and all monetary benefits that the financial services licensee is required by that regulation to provide; and

(b) all cases where the financial services licensee determined that an amount that was just and equitable in the circumstances for the purposes of subregulation 7.7A.15AK(2) was nil.

(3) The requirements are as follows:

(a) an explanation of how the financial services licensee ascertained the identity of the product holders;

(b) an explanation of:

(i) if paragraph (2)(a) applies—how the financial services licensee determined that the amounts to pay, or the amounts of the monetary benefit to provide, were just and equitable in the circumstances for the purposes of subregulation 7.7A.15AK(2); and

(ii) if paragraph (2)(b) applies—how the financial services licensee determined that nil amounts were just and equitable in the circumstances for the purposes of subregulation 7.7A.15AK(2);

(c) a description of the financial product or products to which the conflicted remuneration relates, including the following information:

(i) the name of that product (or the names of those products);

(ii) the product identification number of that product (or the product identification numbers of those products) (if any);

(d) if paragraph (2)(a) applies:

(i) the date by which the financial services licensee was required under regulation 7.7A.15AK to pay the amounts or provide the monetary benefits; and

(ii) the date or dates on which the amounts were paid, or the monetary benefits were provided; and

(iii) a description of the manner in which the amounts were paid, or the monetary benefits were provided.

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.

Subdivision C—Financial statements of financial services licensees

7.8.12A Modification of section 989B of the Act

(1) For paragraph 992C(1)(c) of the Act, Part 7.8 of the Act applies as if subsection 989B(3) were modified to read as follows:

“(3) The licensee must, with the statement and balance sheet, lodge with ASIC:

(a) for a licensee who is a limited licensee for the whole of a financial year—a compliance certificate containing the information and matters required by the regulations; or

(b) for a licensee who is a limited licensee for part of a financial year:

(i) a compliance certificate containing the information and matters required by the regulations for the part of the financial year that the licensee was a limited licensee; and

(ii) an auditor’s reporting containing the information and matters required by the regulations for the part of the financial year that the licensee was not a limited licensee; or

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:

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;

(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: Financial product advice on self managed superannuation funds includes advice about acquiring or disposing of an interest in a self managed superannuation fund.

limited licensee means a financial services licensee that:

(a) does not deal with money to which Division 2 of Part 7.8 of the Act applies; and

(b) is only licensed to provide one or more limited financial services.

simple managed investment scheme has the same meaning as in the regulations.”.

7.8.13 Auditor’s report with annual profit and loss statement and balance sheet

(1) For subparagraph 989B(3)(b)(ii) or paragraph 989B(3)(c) of the Act, an auditor’s report lodged with a true and fair profit and loss statement and balance sheet in respect of a financial year must be lodged with ASIC in the prescribed form.

(2) For subparagraph 989B(3)(b)(ii) or paragraph 989B(3)(c) of the Act, an auditor’s report lodged with a true and fair profit and loss statement and balance sheet in respect of a financial year must contain a statement of the auditor’s opinion on the following matters:

(a) the effectiveness of internal controls used by a financial services licensee to comply with:

(i) Divisions 2, 3, 4, 4A, 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;

7.8.13A Compliance certificate with profit and loss statement and balance sheet

For paragraph 989B(3)(a) and subparagraph 989B(3)(b)(i) of the Act, a compliance certificate lodged by a licensee with a true and fair profit and loss statement and balance sheet in respect of a financial year must:

(a) be lodged with ASIC in the prescribed form; and

(b) be signed by:

(i) if the licensee is an individual—the licensee; or

(ii) if the licensee is a corporation—an officer of the corporation; or

(iii) if the licensee is a partnership or the trustees of a trust—a partner or trustee who performs duties in relation to financial services.

7.8.14 Contents of annual profit and loss statement and balance sheet and applicable accounting procedures

For paragraph 989C(a) of the Act, a true and fair profit and loss statement and balance sheet in respect of a financial year must contain a declaration by the financial services licensee that:

(a) the profit and loss statement and balance sheet give a true and fair view of the matters stated in it; and

(b) if the licensee is required to lodge an auditor’s report under subparagraph 989B(3)(b)(ii) or paragraph 989B(3)(c) of the Act—the auditor’s report lodged with the profit and loss statement and balance sheet is a true copy of the report on the profit and loss statement and balance sheet of the financial services licensee; and

(c) if the licensee is required to lodge a compliance certificate under paragraph 989B(3)(a) or subparagraph 989B(3)(b)(i) of the Act—the information in the compliance certificate lodged with the profit and loss statement and balance sheet is complete and accurate.

7.8.14A Lodgement of annual profit and loss statement and balance sheet

For paragraph 992C(1)(c) of the Act, Part 7.8 of the Act applies as if paragraph 989D(1)(b) were modified to read as follows:

‘(b) if the licensee is:

(i) a body corporate that is a disclosing entity or a registered scheme—the day that is 3 months after the end of that financial year; or

(ii) a body corporate that is not a disclosing entity or a registered scheme—the day that is 4 months after the end of that financial year.’.

Subdivision D—Appointment etc. of auditors

7.8.14B Modification of section 990B of the Act

(1) For paragraph 992C(1)(c) of the Act, Part 7.8 of the Act applies as if subsection 990B(1) of the Act were modified by:

(a) omitting “must, within 1 month after beginning to hold the licence,” and substituting “who is not a limited licensee must”; and

(b) omitting “(4) and (5)” and substituting “(4), (5) and (5A)”.

(2) For paragraph 992C(1)(c) of the Act, Part 7.8 of the Act applies as if section 990B of the Act were modified by inserting after subsection 990B(5) the following subsection:

“(5A) The licensee must appoint an auditor or auditors within:

(a) if the licensee was a limited licensee—one month after the licensee ceased to be a limited licensee; or

(b) for all other licensees—one month after beginning to hold the licence.”.

(3) For paragraph 992C(1)(c) of the Act, Part 7.8 of the Act applies as if subsection 990B(9) of the Act were modified to read as follows:

“(9) In this section:

limited financial services means the following financial services:

(a) financial product advice on self managed superannuation funds;

(b) financial product advice on superannuation products in relation to a person’s existing holding in a superannuation product but only to the extent required for:

(i) making a recommendation that the person establish a self managed superannuation fund; or

(ii) providing advice to the person on contributions or pensions under a superannuation product;

(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: Financial product advice on self managed superannuation funds includes advice about acquiring or disposing of an interest in a self managed superannuation fund.

limited licensee means a financial services licensee that:

(a) does not deal with money to which Division 2 of Part 7.8 of the Act applies; and

(b) is only licensed to provide one or more limited financial services.

person means:

(a) an individual auditor; or

(b) an authorised audit company.

simple managed investment scheme has the same meaning as in the regulations.”.

7.8.15 Appointment of auditor by financial services licensee

(1) For subsections 990B(7) and (8) of the Act, this regulation:

(a) sets out matters related to the appointment of a firm as auditor of the financial statements of a financial service licensee; and

(b) modifies the effect of section 990E of the Act.

(1A) If an applicant for a financial services licence:

(a) specifies, in the application for the licence, the name of a person or firm that is to be, or has been, appointed to audit the applicant’s financial statements; and

(b) the auditor or auditors specified are appointed before the end of 1 month after the licence takes effect;

the applicant is taken to have lodged a notice under subsection 990B(6) of the Act.

(2) The appointment is taken to be an appointment of each person who is:

(a) a member of the firm; and

(b) a registered company auditor;

whether the person is resident in Australia or not at the date of the appointment.

(3) Unless subregulation (4) applies, the appointment of the members of a firm as auditors that is taken by subregulation (2) to have been made because of the appointment of the firm as auditor of the holder is not affected by the dissolution of the firm.

(4) If a firm that has been appointed as auditor is reconstituted because of the death, retirement or withdrawal of a member or members, or because of the admission of a new member or new members, or both:

(a) a person who:

(i) was taken under subregulation (2) to be an auditor of the financial services licensee; and

(ii) has retired or withdrawn from the firm as previously constituted;

is taken to have resigned as auditor as from the day of the retirement or withdrawal; and

(b) a person who:

(i) is a registered company auditor; and

(ii) is admitted to the firm;

is taken to have been appointed as an auditor of the holder as from the date of the admission; and

(c) the reconstitution of the firm does not affect the appointment of the continuing members of the firm who are registered company auditors as auditors; and

(d) nothing in paragraphs (a) to (c) affects the operation of section 990C of the Act.

(5) Sections 990F to 990H of the Act do not apply to a resignation mentioned in paragraph (4)(a) unless:

(a) the person who is taken to have resigned was the only member of the firm who was a registered company auditor; and

(b) there is no member of the firm who is a registered company auditor after the retirement or withdrawal of that person.

(6) A report or notice that purports to be made or given by a firm appointed as auditor is taken not to have been duly made or given unless it is signed by a member of the firm who is a registered company auditor:

(a) in the firm’s name; and

(b) in his or her own name.

(7) If a vacancy in the office of an auditor continues, the surviving or continuing auditor or auditors (if any) may act as auditor while the vacancy continues.

(8) If a vacancy occurs in the office of an auditor, and there is no surviving or continuing auditor of the financial services licensee, the financial services licensee must, within 14 days after the vacancy occurs appoint as auditor:

(a) a person who is eligible to act as auditor; or

(b) 2 or more persons each of whom is eligible to act as auditor; or

(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;

(i) the financial services licensee; or

(ii) if the financial services licensee is a body corporate—to a body corporate related to the financial services licensee;

(d) the person is a partner or employee of the financial services licensee;

(e) if the financial services licensee is a body corporate—the person is:

(i) an officer of the body; or

(ii) a partner, employer or employee of an officer of the body; or

(iii) a partner or employee of an employee of an officer of the body.

(2) For section 990C of the Act, a firm is ineligible to act as auditor of a financial services licensee at a particular time unless:

(a) at least 1 member of the firm is a registered company auditor who is ordinarily resident in Australia; and

(b) if the business name under which the firm is carrying on business is not registered under a law of a State or Territory—a return has been lodged in the prescribed form showing, in relation to each member of the firm:

(i) the member’s full name; and

(ii) the member’s address at that time; and

(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

(g) if the financial services licensee is a body corporate—no officer of the financial services licensee receives any remuneration from the firm for acting as a consultant to it on accounting or auditing matters.

(3) For paragraphs (1)(b), (1)(c), (2)(c) and (2)(d), a debt owed by a natural person to a body corporate is to be disregarded if:

(a) the body corporate is:

(i) an Australian ADI; or

(ii) a body corporate registered under the Life Insurance Act 1995; and

(b) the debt arose because of a loan that the body corporate or entity made to the person in the ordinary course of its ordinary business; and

(c) the person used the amount of the loan to pay the whole or part of the purchase price of premises that the person uses as their principal place of residence.

(4) For subregulations (1) and (2), a person is taken to be an officer of a body corporate if:

(a) the person is an officer of a related body corporate; or

(b) unless ASIC directs that this paragraph not apply in relation to the person—the person has, at any time within the immediately preceding period of 12 months, been an officer or promoter of the body corporate or of a related body corporate.

(5) For this regulation, a person is not taken to be an officer of a body corporate by reason only of being or having been the liquidator of the body corporate or of a related body corporate.

(6) For this regulation, a person is not taken to be an officer of a body corporate:

(a) by reason only of having been appointed as an auditor of that body corporate or of a related body corporate; or

(b) for any purpose relating to taxation, a public officer of a body corporate; or

(c) by reason only of being or having been authorised to accept on behalf of the body corporate or a related body corporate:

(i) service of process; or

(ii) any notices required to be served on the body corporate or related body corporate.

Division 7—Other rules about conduct

7.8.17 Priority to clients’ orders

(1) For paragraph 991B(3)(b) of the Act, if a participant in a licensed market:

(a) enters into a transaction; and

(b) complies with all of the participant’s obligations in relation to the transaction under the market integrity rules and the operating rules of the licensed market;

subsection 991B(2) of the Act does not apply in relation to the transaction.

(2) Subject to subregulation (3), for paragraph 991B(3)(b) of the Act, subsection 991B(2) of the Act does not apply to a transaction if, at the time that the instruction is issued, the financial services licensee is not a participant in the licensed market on which the particular financial product is being traded.

(3) Subregulation (2) does not apply if:

(a) the financial services licensee deals, or has dealt, in a financial product traded on that market:

(i) on the licencee’s own behalf (whether directly or through an agent or other representative); or

(ii) on behalf of a client; or

(b) an associate of the financial services licensee is a participant in the market mentioned in that subregulation.

7.8.18 Instructions to deal through licensed markets

(1) For section 991C of the Act, this regulation applies in relation to all instructions received by a financial services licensee to deal in financial products through licensed markets, except to the extent that the market integrity rules, or the operating rules of a licensed market in relation to which the financial services licensee is a participant, otherwise provide.

(2) Subject to subregulation (3), the financial services licensee must transmit, in the sequence in which they are received, all instructions to deal in a class of financial products at or near the market price for financial products of that class prevailing immediately before execution of the instructions.

(3) If:

(a) a financial services licensee proposes to deal in a class of financial products on the financial services licensee’s own account; and

(b) the person by whom or on whose instructions the instructions for the dealing are to be transmitted is aware of instructions of a client of the financial services licensee to deal in that class of financial products at or near the market price for a financial product of that class prevailing at that time (being instructions that have not been transmitted);

that person must not transmit, and must not give instructions to any other person to transmit, the instructions to give effect to the proposal of the financial services licensee to deal in that class of financial products before the instructions of the client are transmitted.

(4) If:

(a) during a particular period, a financial services licensee transmits instructions (whether or not those instructions consist of, or include, instructions giving effect to a proposal of the financial services licensee to deal in the class of financial products concerned on the financial services licensee’s own account) to deal in a class of financial products at or near the market price for a financial product of that class prevailing immediately before execution of the instructions; and

(b) dealings in that class of financial products are effected pursuant to those instructions;

the financial services licensee must allocate the dealings to those instructions:

(d) in the sequence in which the financial services licensee transmitted the instructions.

(5) A financial services licensee (licensee 1), or a director, partner, officer or employee of a financial services licensee, must not disclose to any other financial services licensee, or to a person engaged or employed in the business of licensee 1 or any other financial services licensee, instructions of a client to deal in a class of financial products, except:

(a) to the extent necessary to execute the instructions; or

(b) as required by this Act or any other law.

(6) In this regulation, a reference to the transmission by a financial services licensee of instructions to deal in a class of financial products is a reference:

(a) if the financial services licensee has direct access to the licensed market on which the instructions are to be executed—to the transmission of the instructions to that licensed market; or

(b) if the financial services licensee has access to the licensed market on which the instructions are to be executed only through another financial services licensee—to the transmission of the instructions to that other financial services licensee.

7.8.19 Records of instructions to deal on licensed markets and foreign markets

(1) For section 991D of the Act, this regulation applies in relation to:

(a) instructions received by a financial services licensee to deal in financial products, on behalf of a client, through licensed markets or through other financial markets (whether inside or outside Australia); and

(b) instructions received by a financial services licensee to deal in financial products, on the financial service licensee’s own account, through licensed markets or through other financial markets (whether inside or outside Australia).

(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;

(d) the date and time of receipt of the instructions, and the person who received the instructions;

(e) the date and time of transmission of the instructions, and the person who transmitted the instructions;

(f) the date and time of execution of the instructions.

(3) For subregulation (2), if:

(a) a financial services licensee transmits for execution on a financial market outside Australia and the external Territories instructions to deal in financial products; and

(b) it is not reasonably practicable for the financial services licensee to set out the date and time of execution of those instructions in its records;

the financial services licensee must set out the date and time as precisely as is reasonably practicable.

(4) The financial services licensee must keep records relating to instructions given by a client to deal in financial products in a manner that makes the records identifiable separately from records relating to instructions to deal in financial products on the financial services licensee’s own account.

(5) The financial services licensee must keep the records mentioned in subregulation (2) for at least 5 years after the particulars are created.

7.8.20 Dealings with non‑licensees

(1) For the purposes of subsection 991E(1) of the Act, section 991E of the Act does not apply in relation to the sale or purchase of the following financial products by the body corporate by which the financial products were made available:

(a) a security made available in accordance with Chapters 5C and 6D of the Act;

(b) a managed investment product made available in accordance with Chapters 5C, 7 and 8A 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 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 financial services licensee had entered the transaction with the non‑licensee as agent and not on its own behalf.

(4) For subregulation (3):

(a) an authorisation given to the financial services licensee by the non‑licensee:

(i) may be given orally, or in writing, by the non‑licensee; and

(ii) is effective until it is revoked, either orally or in writing, by the non‑licensee; and

(b) if the non‑licensee gives an oral authorisation to the financial services licensee, or revokes an authorisation orally, the financial services licensee must:

(i) make a written record of the authorisation or revocation; and

(ii) provide a copy of the written record to the non‑licensee within 10 business days after the day on which the authorisation is given or revoked; and

(c) a disclosure of the amount of the brokerage, commission or fee, or the basis on which it will be calculated must be given by the financial services licensee to the non‑licensee:

(i) in writing: and

(ii) if the transaction is an on‑market transaction—in relation to the particular transaction, a class of on‑market transactions that includes the transaction, or all on‑market transactions.

(5) For subsection 991E(7) of the Act, a financial services licensee must:

(a) keep records of the following matters relating to each financial products transaction entered into by the financial services licensee on the financial service licensee’s own behalf:

(i) a description of the financial products transaction;

(ii) the date and time of receipt of the instructions for the financial products transaction;

(iii) the date and time of transmission of the instructions to the licensed market concerned;

(iv) the date and time of execution of the instructions;

(v) the source of the funds, or financial products, used to effect the financial products transaction; and

(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.

7.8.21 Dealings involving employees of financial services licensees

(1) For subsection 991F(2) of the Act, that subsection does not have effect in relation to:

(a) a bank; or

(b) a body corporate that gives credit in good faith to a person (not being a director of the body corporate) employed by the body corporate, or by another body corporate that is related to the first body corporate, to enable the person to acquire financial products that are:

(i) fully paid shares in the body corporate; and

(ii) to be held in beneficial ownership by the person.

(1A) For subsection 991F(2) of the Act, that subsection does not have effect in relation to a financial services licensee that gives credit in good faith to a person employed by:

(a) the financial services licensee; or

(b) a person related to the financial services licensee;

to enable the person to acquire an insurance product in relation to a credit facility provided by the financial services licensee to the person.

Example: Mortgage insurance is an insurance product in relation to a credit facility.

(2) For subsection 991F(3) of the Act, a body corporate that is related to a financial services licensee may act as the agent of an employee of the financial services licensee, in respect of the acquisition mentioned in that subsection, only if:

(a) before the acquisition, the employee has informed the related body corporate that the employee is acquiring, or agreeing to acquire, the financial product on the employee’s own behalf; and

(b) the financial services licensee has in place arrangements with the related body corporate to allow the licensee to be informed of, and to gain access to records relating to, the acquisition.

(3) For subsection 991F(3) of the Act, a body corporate may act as the agent of a person who is an employee of a financial services licensee that is a participant in a licensed market and is so employed in connection with a business of dealing in financial products, in respect of an acquisition mentioned in that subsection, if:

(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

(d) the employee gives the employer a copy of the confirmation of the transaction.

(4) For subsection 991F(3) of the Act, a person who is:

(a) an employee of a financial services licensee that is a participant in a licensed market; and

(b) employed in connection with a business of dealing in financial products;

may, on the person’s own behalf, acquire, or agree to acquire, a financial product that is able to be traded on that licensed market, without the licensee’s acting as an agent in respect of the transaction, if the person’s employment is not directly connected with the licensee’s business of dealing in financial products on that licensed market.

(5) Subject to subregulation (6), for subsection 991F(3) of the Act, the subsection does not apply unless:

(a) the particular financial product that is acquired or proposed to be acquired is a financial product traded on a market in which the financial services licensee is not a participant at the time of the acquisition or the proposed acquisition; or

(b) the particular financial product is a derivative the value of which is derived from a financial product mentioned in paragraph (a).

(6) Subregulation (5) does not apply if:

(a) the financial services licensee deals, or has dealt, in a financial product traded on that market:

(i) on the licensee’s own behalf (whether directly or through an agent or other representative); or

(ii) on behalf of a client; or

(b) an associate of the financial services licensee is a participant in the market mentioned in that subregulation.

Division 8—Miscellaneous

7.8.21A Exceptions to prohibition on hawking of financial products

For the purposes of paragraph 992A(2)(c) of the Act, the following kinds of offer, request or invitation are prescribed:

(a) an offer for the issue or sale of:

(i) listed securities; or

(ii) an interest in a listed managed investment scheme;

that is made by telephone by a financial services licensee;

(b) an offer for the issue or sale of securities that is made to a client by a financial services licensee through whom the client has bought or sold securities in the last 12 months;

(c) an offer for the issue or sale of an interest in a managed investment scheme that is made to a client by a financial services licensee through whom the client has acquired or disposed of an interest in a managed investment scheme in the last 12 months;

(d) a CSF offer;

(f) an offer of, or a request or invitation relating to, a financial product that is an arrangement under which medical indemnity cover to which the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003 applies is provided to:

(i) a medical practitioner (within the meaning of that Act); or

(ii) a registered health professional (within the meaning of that Act) in relation to whom regulations made for the purposes of Part 3 of that Act apply;

(g) an offer of, or a request or invitation relating to, a financial product that is an interest in a scheme that is in the nature of a litigation funding scheme, or a litigation funding arrangement, mentioned in regulation 5C.11.01;

(h) an offer of, or a request or invitation relating to, a financial product that is a basic banking product, if the offer, request or invitation was made in the course of contact with the consumer that the consumer initiated for any purpose;

(i) an offer of, or a request or invitation relating to, a financial product that is a facility if:

(i) the definition of basic deposit product in section 9 of the Act does not apply to the facility, but would apply to the facility if paragraph (d) of that definition were disregarded; and

(ii) funds are able to be withdrawn or transferred from the facility on the instruction of, or by authority of, the depositor with prior notice of 31 days or less to the ADI that makes the facility available (whether or not the withdrawal or transfer will attract a reduction in the return generated for the depositor); and

(iii) the offer, request or invitation was made in the course of contact with the consumer that the consumer initiated for any purpose;

(j) an offer for the issue or sale of a financial product that is substantially similar to a financial product (the current financial product) that the recipient of the offer:

(i) already holds with the offeror; or

(ii) held with the offeror at any time during the period of 30 day before the day on which the offer is made;

and that is in the nature of an offer to renew the current financial product.

7.8.23 Return of financial product: transfer between superannuation entities or RSAs

(1) For the purposes of paragraph 992AA(2)(c) of the Act, this regulation applies in relation to a superannuation product or an RSA 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 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 the purposes of paragraph 992AA(2)(c) 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 the purposes of paragraph 992AA(3)(a) of the Act, the following classes of financial products are excluded from section 992AA of the Act:

(a) a financial product offered or issued under a distribution reinvestment plan or switching facility;

(b) a financial product the acquisition of which is an additional contribution required by an existing agreement or contract;

(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 the purposes of paragraph 992AA(2)(c) 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.

Part 7.8A—Design and distribution requirements relating to financial products for retail clients

Division 1—Preliminary

7.8A.01 Definitions

In this Part:

credit has the same meaning as in subregulation 2B(3) of the Australian Securities and Investments Commission Regulations 2001.

credit facility has the same meaning as in the Australian Securities and Investments Commission Regulations 2001.

extended operation financial product means a financial product that:

(a) is a financial product within the meaning of Division 2 of Part 2 of the ASIC Act; and

(b) is not a financial product within the meaning of the Act.

7.8A.02 Meaning of regulated person—prescribed persons

(1) This regulation is made for the purposes of paragraph (c) of the definition of regulated person in subsection 994A(2) of the Act.

Persons who are exempt from having an Australian financial services licence

(2) A person is prescribed in relation to a financial product if the person is exempt from the requirement in section 911A of the Act to hold an Australian financial services licence under either of the following provisions of the Act:

(a) paragraph 926A(2)(a);

(b) paragraph 926B(1)(a).

Product distributors

(3) A product distributor within the meaning of section 910A of the Act (as modified by the ASIC Corporations (Basic Deposit and General Insurance Product Distribution) Instrument 2015/682) is prescribed in relation to the following financial products:

(a) a basic deposit product;

(b) a general insurance product;

Credit licensees

(4) Each of the following persons is prescribed in relation to a financial product that is a credit facility:

(a) a person who is a licensee within the meaning of the National Consumer Credit Protection Act 2009 (the Credit Act);

(b) a person who is a credit representative (within the meaning of the Credit Act) of such a licensee;

(c) a person who is exempt from the operation of section 29 of the Credit Act (which is about the requirement to hold a credit licence) under any of the following provisions of that Act:

(i) paragraph 109(1)(a);

(ii) paragraph 109(3)(a);

(iii) paragraph 110(1)(a);

(d) a person who engages in a credit activity (within the meaning of section 6 of the Credit Act) on the person’s own behalf;

(e) a person who contravenes section 29 of the Credit Act.

Issuers and sellers of extended operation financial products

(5) Each of the following persons is prescribed in relation to an extended operation financial product:

(a) a person who issues the product;

(b) a person who sells the product under a regulated sale.

Division 2—Financial products for which target market determinations are required

7.8A.03 Financial products for which target market determinations are required

This Division is made for the purposes of paragraphs 994B(1)(c) and 994B(2)(b) of the Act.

7.8A.04 Jurisdictional scope of Division

A person is not required by this Division to make a target market determination for a financial product if the product is:

(a) a financial product that is not available for acquisition by issue, or by regulated sale, in this jurisdiction; or

(b) securities (as defined in subsection 92(7) of the Act) offered under a recognised offer in relation to a recognised jurisdiction.

7.8A.05 Simple corporate bonds

A person must make a target market determination for a financial product if:

(a) the product is a simple corporate bonds depository interest where the bonds are to be issued under a 2‑part simple corporate bonds prospectus; and

(b) the person is the person required to prepare a disclosure document for the bonds.

Note: The person must make the determination before any person engages in retail product distribution conduct in relation to the product: see subparagraph 994B(2)(b)(ii) of the Act.

7.8A.06 Debentures of certain bodies

A person must make a target market determination for a financial product if:

(a) the product is a debenture of a body that is:

(i) an ADI (short for authorised deposit‑taking institution) within the meaning of the Banking Act 1959; or

(ii) registered under section 21 of the Life Insurance Act 1995; and

(b) but for subsection 708(19) of the Act, disclosure to investors under Part 6D.2 of the Act would be needed for an offer of the debenture for issue or sale; and

(c) the person is the person who, but for subsection 708(19) of the Act, would be required to prepare a disclosure document for an offer of the debenture for issue or sale.

Note: The person must make the determination before any person engages in retail product distribution conduct in relation to the product: see subparagraph 994B(2)(b)(ii) of the Act.

7.8A.07 Basic banking products

A person must make a target market determination for a financial product if:

(a) the product is a basic banking product; and

(b) the person issues, or offers to issue, the product.

Note: The person must make the determination before any person engages in retail product distribution conduct in relation to the product: see subparagraph 994B(2)(b)(ii) of the Act.

7.8A.08 Investor‑directed portfolio services

(1) A person must make a target market determination for a financial product if:

(a) the product is an interest in a managed investment scheme; and

(b) the interest arises out of participation or proposed participation in an IDPS, but is not IDPS property; and

(c) but for ASIC Class Order [CO 13/763], Part 7.9 of the Act would give rise to an obligation on a person to give another person a Product Disclosure Statement for the interest; and

(d) the person is the operator of the IDPS.

Note: The person must make the determination before any person engages in retail product distribution conduct in relation to the product: see subparagraph 994B(2)(b)(ii) of the Act.

(2) The following terms used in this regulation have the same meaning as in the section 912AD set out in paragraph 6 of ASIC Class Order [CO 13/763]:

(a) IDPS;

(b) IDPS property;

7.8A.09 Exchange traded products

(1) A person must make a target market determination for a financial product if:

(a) the product is covered by subregulation (4); and

(b) the product is, or will be, able to be traded on a licensed market; and

(d) it is reasonably likely that a regulated person will offer to sell the product to a person as a retail client within 12 months of the issue of the product; and

(e) the person is the issuer of the product.

Note: Subsection 1012C(7) of the Act affects whether the issuer is taken to have a particular purpose.

(2) The time before which the issuer is required to make the determination is the close of business on the day on which the issuer first issues the product with the purpose mentioned in paragraph (1)(c).

(3) This regulation does not apply to a financial product if the issuer issued, or offered to issue, the product to a person as a retail client at or before the time specified in subregulation (2).

(4) This subregulation covers the following financial products:

(a) an interest in a managed investment scheme;

(b) a share in a foreign company that has the economic features of a managed investment scheme and is an open‑end investment company registered with the U.S. Securities and Exchange Commission under the Investment Company Act 1940 of the United States of America;

(d) an option to acquire, by way of issue, a financial product covered by paragraph (a), (b) or (c).

7.8A.10 Custodial or depository services

A person must make a target market determination for a financial product if:

(a) the product includes a custodial or depository service; and

(b) but for this regulation, Part 7.8A of the Act would not apply in relation to the financial product; and

(d) the person is the issuer of the product.

Note: The person must make the determination before any person engages in retail product distribution conduct in relation to the product: see subparagraph 994B(2)(b)(ii) of the Act.

Division 3—Exemptions

7.8A.20 Financial products for which target market determinations are not required

(1) For the purposes of paragraph 994B(3)(f) of the Act, each kind of financial product covered by a subregulation of this regulation is prescribed.

Superannuation

(2) This subregulation covers an interest in an eligible rollover fund (within the meaning of the Superannuation Industry (Supervision) Act 1993).

(3) This subregulation covers a defined benefit interest (within the meaning of the Superannuation Industry (Supervision) Regulations 1994).

Insurance products

(4) This subregulation covers a medical indemnity insurance product.

Depository interests

(5) This subregulation covers a depository interest in fully paid ordinary shares in a foreign company, being shares in relation to which, if they were offered directly to retail clients, Part 7.8A of the Act would not apply.

Money products

(6) This subregulation covers a bank draft, including (but not limited to):

(a) a cheque drawn by a financial institution on itself; or

(b) a cheque drawn by a financial institution on a financial institution other than itself.

(7) This subregulation covers a money order issued as a money order by, or for, Australia Post.

Extended operation financial products not received in this jurisdiction

(8) This subregulation covers an extended operation financial product, if the offer to issue or sell the product is not received in this jurisdiction.

Credit facilities

(9) This subregulation covers each of the following:

(a) a credit facility that is not or was not issued, or that will not be issued, in the course of a business that is wholly or partly a business of providing credit;

(b) a credit facility under the terms of which the credit is, or must be, applied wholly or predominantly for business purposes;

(i) involves a matter referred to in paragraph (b) of the definition of credit in subregulation 2B(3) of the Australian Securities and Investments Commission Regulations 2001; but

(ii) does not involve credit of a kind referred to in paragraph (a) of that definition;

(d) a credit facility that is the provision of a mortgage that secures obligations under a credit contract (but not the credit contract);

(e) the provision of credit by a pawnbroker in the ordinary course of a pawnbroker’s business (being a business which is being lawfully conducted by the pawnbroker).

Income management regimes

(10) This subregulation covers a financial product that is:

(a) a BasicsCard bank account (within the meaning of Part 3AA of the Social Security (Administration) Act 1999); or

(b) a debit card that is attached to an account referred to in paragraph (a); or

(d) either:

(i) a stored value card (within the meaning of Part 3B of that Act); or

(ii) a voucher given under subsection 123YC(2) or 123YD(2) of that Act;

that relates to an account referred to in paragraph (c).

7.8A.25 Exemption from Part 7.8A—Employers complying with certain superannuation guarantee obligations

(1) For the purposes of paragraph 1368(d) of the Act, Part 7.8A does not have effect in relation to a person in relation to a transaction that involves retail product distribution conduct if:

(a) the person is an employer; and

(b) the relevant retail client is an employee of the employer; and

(2) The following retail product distribution conduct is covered by this subregulation:

(a) under Part 7.9, giving the employee a Product Disclosure Statement for a product that is a default fund product for the employer and employee;

(b) dealing in a financial product that consists only of the employer paying contributions on behalf of the employee into a product that is:

(i) a default fund product for the employer and employee; or

(ii) a chosen fund product for the employee;

(c) dealing in a financial product that consists only of the employer arranging for the issue to the employee of a product that is:

(i) a default fund product for the employer and employee; or

(ii) a chosen fund product for the employee.

(3) In this regulation:

chosen fund product, for an employee, means a financial product that is an interest in a chosen fund (within the meaning of Part 3A of the Superannuation Guarantee (Administration) Act 1992) for the employee.

default fund product: a financial product that is an interest in a fund is a default fund product for an employer and an employee at a time if, assuming that the employee were a member of the fund and the employer were to make a contribution to the fund at the time for the benefit of the employee, the employer could rely on a provision of section 32C of the Superannuation Guarantee (Administration) Act 1992 (other than subsection 32C(1)) to satisfy the choice of fund requirements in relation to the contribution.

fund has the same meaning as in Part 3A of the Superannuation Guarantee (Administration) Act 1992.

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

contact person, in relation to a superannuation entity, means a named individual, or a person holding a designated office or position, who is available to receive and deal with inquiries or complaints by product holders (as the case may be).

contribution includes a benefit that is rolled over or transferred to a fund.

exit charge means a charge that:

(a) is made against:

(i) a product holder’s benefits in a fund or financial product; or

(ii) a product holder or another person on the product holder’s behalf; and

(b) is only made when a payment is:

(i) made in respect of a product holder; or

(ii) transferred.

fund information, in relation to a superannuation product or an RSA, means information required to be given under Subdivision 5.5.

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.

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).

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.

transaction cost means:

(a) brokerage paid because of an investment transaction; or

(b) a cost arising from maintenance of a property investment; or

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

(3) In a Division of this Part, a reference to a fund is a reference to a fund of the kind to which the Division applies.

(5) For the definition of remuneration, payment is taken to have been given to an Australian financial services licensee or an authorised representative for issuing an interest to a member if:

(a) issuing the interest is taken into account to increase the payment given to the Australian financial services licensee or authorised representative for other matters (for example, bonus commission); or

(b) the payment is given after the interest is issued and only if the member remains a member of the fund (for example, trailing commission).

7.9.02 Sub‑plans

(1) This regulation applies if the trustee of a regulated superannuation fund proposes to make a determination as to whether a sub‑plan should be made.

(2) In making a determination, the trustee must have regard to all relevant matters, including each of the following:

(a) whether there is a common factor in a segment of the fund (for example, whether a group of members of the fund have the same employer);

(b) whether the governing rules of the fund provide for a particular segment to be a sub‑plan.

(3) For subsection 1017C(9) of the Act, the sub‑plan is a relevant sub‑plan.

(4) For paragraph 761E(7)(a) of the Act, if:

(a) a person is a member of a superannuation fund in relation to a sub‑plan; and

(b) either:

(i) the person’s membership changes to membership in relation to another sub‑plan; or

(ii) the person holds interests in 2 or more sub‑plans at the same time;

the change to membership in relation to the other sub‑plan is taken to be the issue of a new interest in the superannuation fund.

(5) For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its application in relation to the fund (including a sub‑plan) as set out in Part 1 of Schedule 10A.

7.9.02A Alternative ways of giving Statement

(1) For subsection 1015C(4) of the Act, the following are alternative ways of giving a Statement to a person:

(a) making the Statement available to the person in any way that:

(i) is agreed to by the person; and

(ii) allows the regulated person to be satisfied, on reasonable grounds, that the person has received the Statement;

(b) making the Statement available to the person’s agent in any way that:

(i) is agreed to by the agent; and

(ii) allows the regulated person to be satisfied, on reasonable grounds, that the agent has received the Statement.

(2) If a provision of the Act or these Regulations imposes additional requirements in relation to a matter in subregulation (1), the alternative way of giving a Statement is subject to the requirements.

Note: Regulation 7.9.02B is an example of an additional requirement.

7.9.02B Product Disclosure Statement in electronic form

(1) For paragraph 1015C(5)(b) of the Act, a statement that is to be given in electronic form must, as far as practicable, be presented in a way that will allow the person to whom it is given to keep a copy of it so that the person can have ready access to it in the future.

(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.

Division 2—Arrangements for Product Disclosure Statements in relation to superannuation products and RSAs

Subdivision 2.1—Preliminary

7.9.03 Application of Division 2

This Division applies in relation to superannuation products and RSAs.

Note: See paragraphs 764A(1)(g) and (h) of the Act.

Subdivision 2.2—Late provision of Product Disclosure Statement for certain members of regulated superannuation fund, public offer superannuation fund or successor fund

7.9.04 Product Disclosure Statement to be provided later

(1) For section 1012F of the Act, the following superannuation products are specified:

(a) a superannuation interest issued by the trustee of a regulated superannuation fund that is not a public offer superannuation fund, other than:

(ii) a financial product taken to be issued because of regulation 7.1.04E; or

(iii) an annuity or pension taken to be issued because of subregulation 7.9.02(4); or

(iv) an interest in a self managed superannuation fund that is not acquired at the time that the fund is established;

(b) a pension issued by a superannuation fund the rules of which do not allow a member to receive accumulated benefits in a form other than a pension from that fund;

(c) a superannuation interest issued by the trustee of a successor fund in relation to the transfer of benefits in the fund;

(d) a superannuation interest issued by the trustee of a regulated superannuation fund as a result of complying with a commutation authority issued to the trustee under Subdivision 136‑B in Schedule 1 to the Taxation Administration Act 1953.

(2) For paragraph 1020G(1)(c) of the Act:

(a) section 1012B of the Act is modified in its application in relation to the specified superannuation product as set out in Part 17 of Schedule 10A; and

(b) section 1012I of the Act is modified in its application in relation to the specified superannuation product as set out in Part 17 of Schedule 10A.

Subdivision 2.3—Product Disclosure Statement for RSA

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 as set out in Part 2 of Schedule 10A.

Subdivision 2.4—Additional obligations for eligible rollover funds

7.9.06A Meaning of relevant superannuation entity

For the definition of relevant superannuation entity in subsection 1016A(1) of the Act, a public offer superannuation entity is specified.

7.9.06B Application forms

(1) For paragraph 1016A(2)(f) of the Act, the following situation in which a restricted issue occurs is prescribed:

(a) the financial product is a superannuation product;

(b) the interest is issued by the trustee of a public offer superannuation entity in relation to the payment of benefits to the entity:

(i) from an exempt public sector superannuation scheme; 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 exempt public sector superannuation scheme 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 exempt public sector superannuation scheme to a public offer superannuation entity as if:

(a) a reference in that section to a transferor fund were a reference to the exempt public sector superannuation scheme; 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.

Division 2A—Product Disclosure Statement for warrants

7.9.07A Warrants

(1) This regulation applies in relation to warrants.

(2) For paragraph 1020G(2)(a) of the Act, section 1010A of the Act is modified by adding after subsection 1010A(1):

‘(1A) Despite subsection (1), this Part applies in relation to a financial product to which regulation 7.9.07A of the Corporations Regulations 2001 applies.’.

(3) For paragraph 761E(7)(a) of the Act, if the financial product is entered into, or acquired, on a financial market through an arrangement made by a financial services licensee acting on behalf of another person:

(a) the financial services licensee is not taken to be the issuer of the financial product; and

(b) the warrant issuer is taken to be the issuer of the financial product.

(4) For paragraph 761E(7)(a) of the Act, if the financial product is entered into, or acquired, on a financial market through an arrangement made by an authorised representative of a financial services licensee acting on behalf of another person (not being the licensee):

(a) the financial services licensee is not taken to be the issuer of the financial product; and

(b) the warrant issuer is taken to be the issuer of the financial product.

(5) For paragraph 1013F(2)(f) of the Act:

(a) information that is, or is required to be, disclosed to the market in relation to the underlying thing from which a warrant derives its value, including information published by a market operator in relation to financial products (including warrants and types of warrants) in the form of market data or educational material which is generally made available to the public by the market operator is a matter that may be taken into account for section 1013F of the Act; and

(b) other information that a market operator is required to disclose to the market, in accordance with the Act, including:

(i) information that was required to be disclosed to the market operator; and

(ii) information that the operator was required to disclose in order to meet its obligations under the Act;

is a matter that may be taken into account for section 1013F of the Act; and

(c) information that is generally made available to the public by a market operator in relation to financial products, including information published about a warrant that is entered into or acquired on a financial market in the form of market data or educational material, is a matter that may be taken into account for section 1013F of the Act.

(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.

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

(3) For paragraph 1013F(2)(f) of the Act:

(a) information that is, or is required to be, disclosed to the market in relation to the underlying thing from which a derivative derives its value, including information published by a market operator in relation to financial products (including derivatives and types of derivatives) in the form of market data or educational material which is generally made available to the public by the market operator is a matter that may be taken into account for section 1013F of the Act; and

(b) other information that a market operator is required to disclose to the market, in accordance with the Act, including:

(i) information that was required to be disclosed to the market operator; and

(ii) information that the operator was required to disclose in order to meet its obligations under the Act;

is a matter that may be taken into account for section 1013F of the Act; and

(c) information that is generally made available to the public by a market operator in relation to financial products, including information published about derivatives and types of derivatives in the form of market data or educational material, is a matter that may be taken into account for section 1013F of the Act.

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.

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.

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

(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

(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

(9M) If a regulated person does not give a client a Product Disclosure Statement in reliance on subsection (9L), and the regulated person becomes aware of the address or location of the client, the regulated person must give the client a Product Disclosure Statement as soon as practicable.’.

7.9.07FA Product Disclosure Statement not required for certain specified products

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if section 1012D of the Act were modified by inserting the following subsection after subsection 1012D(7):

‘Recommendation, issue or sale situation—when Product Disclosure Statement not required

(7A) In a recommendation situation, an issue situation or a sale situation, the regulated person does not have to give the client a Product Disclosure Statement for the financial product if:

(a) the product is:

(i) a basic deposit product; or

(ii) a facility for making non‑cash payments (see section 763D) that is related to a basic deposit product; or

(iii) a traveller’s cheque; and

(b) the regulated person has provided information about the cost of the product (if any) to the client; and

(c) the regulated person has informed the client as to whether or not any amounts will or may be payable by the holder of the product, in respect of the product, after its acquisition; and

(ca) if the product is a protected account under the Banking Act 1959—the regulated person has informed the client that:

(i) the account‑holder may be entitled to payment under the financial claims scheme; and

(ii) payments under the scheme are subject to a limit for each depositor; and

(iii) information about the financial claims scheme can be obtained from the APRA website at http://www.fcs.gov.au; and

(d) the regulated person has asked the client whether or not the client would like further information about the amounts mentioned in paragraph (c); and

(e) if the client indicates that the client would like the further information about the amounts mentioned in paragraph (c)—the regulated person has provided that information.’.

7.9.07FB Product Disclosure Statement not required if client not in this jurisdiction

For paragraph 1020G(1)(c) of the Act, section 1012D of the Act is modified by inserting after subsection 1012D(8):

“(8A) In a recommendation situation, an issue situation or a sale situation, the regulated person does not have to give the client a Product Disclosure Statement for the financial product if the client is not in this jurisdiction.”

7.9.07FC Product Disclosure Statement not required general insurance situation

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified by adding after section 1014E of the Act the following section:

“1014EA General insurance product situation in which only a Supplementary Product Disclosure Statement need be given

(1) This section applies if:

(a) a person (the client) acquires a general insurance product (the original product) from another person (the regulated person); and

(b) the client received a Product Disclosure Statement (the original PDS) relating to the product as required by the Act; and

(c) the contract of insurance provides a renewable insurance cover (within the meaning of subsection 58(1) of the Insurance Contracts Act 1984); and

(d) the regulated person offers to renew the client’s contract of insurance (the new product); and

(e) the regulated person is required to give the client a Product Disclosure Statement (the new PDS) relating to the new product; and

(f) the original PDS contains some but not all of the information that the new PDS is required to contain.

(2) The regulated person may give the client a new PDS.

(3) If the regulated person does not give the client a new PDS, the regulated person must give the client a Supplementary Product Disclosure Statement that contains the additional information.

(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.”

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’.

Division 2E—Obligation to make information publicly available: registrable superannuation entities

Subdivision 2E.1—Obligation to make product dashboard publicly available

7.9.07L Modification of Act

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if section 1017BA of the Act were modified as set out in Part 6A of Schedule 10A.

7.9.07M Source of power for this Subdivision

This Subdivision is made for paragraphs 1017BA(1)(c) and (e) and subsection 1017BA(2) of the Act.

7.9.07N Definitions

In this Subdivision:

lifecycle exception has the meaning given by subsection 29TC(2) of the SIS Act.

lifecycle MySuper product means a MySuper product to which a lifecycle exception applies.

lifecycle stage, of a MySuper product offered by a regulated superannuation fund, means a subclass of members of the fund who hold the MySuper product, determined on the basis of:

(a) age; or

(b) age and the factors mentioned in regulation 9.47 of the SIS Regulations.

offering period means:

(a) for a MySuper product other than a lifecycle MySuper product:

(i) if the MySuper product has been offered for less than 10 financial years and there is no predecessor product—the number of whole financial years for which the product has been offered; or

(ii) if the MySuper product and a predecessor product have been offered for a total of less than 10 financial years—the number of whole financial years for which the products have been offered; or

(b) for a lifecycle stage of a lifecycle MySuper product:

(i) if the lifecycle stage of the MySuper product has been offered for less than 10 financial years and there is no equivalent lifecycle stage of a predecessor product—the number of whole financial years for which the lifecycle stage has been offered; or

(ii) if the lifecycle stage of the MySuper product and an equivalent lifecycle stage of a predecessor product have been offered for a total of less than 10 financial years—the number of whole financial years for which the lifecycle stage of the MySuper product and the predecessor product have been offered.

predecessor product, in relation to a MySuper product, means a default investment option in existence on 30 June 2013 in relation to which, if a member’s accrued default amount were attributed to the MySuper product, the RSE licensee would be exempted from disclosure requirements under subregulation 9.46(2) of the SIS Regulations.

reporting standard means a reporting standard determined by APRA under subsection 13(1) of the Financial Sector (Collection of Data) Act 2001, as in force from time to time.

7.9.07P Meaning of MySuper product dashboard reporting standards

For this Subdivision, a reporting standard is a MySuper product dashboard reporting standard if the reporting standard contains a clause stating that it relates to information that will be included in a product dashboard for a MySuper product.

7.9.07Q Product dashboard—how information must be set out

(1) Information for a MySuper product must be set out in a product dashboard as follows (including the headings):

PRODUCT DASHBOARD
Return target
Return
Comparison between return target and return
Level of investment risk
Statement of fees and other costs

(2) For a lifecycle MySuper product, the information mentioned in each item of the table must be set out in relation to each lifecycle stage of the product.

7.9.07R Product dashboard—return target

(1) The return target for a MySuper product other than a lifecycle MySuper product must be worked out in accordance with the MySuper product dashboard reporting standards.

(2) The return target for a lifecycle MySuper product must be worked out in relation to each lifecycle stage of the product in accordance with the MySuper product dashboard reporting standards.

(3) The period in relation to which the return target must be worked out is the period of 10 years starting at the beginning of the current financial year.

7.9.07S Product dashboard—return

MySuper product other than lifecycle MySuper product

(1) The return for a MySuper product other than a lifecycle MySuper product must be worked out in accordance with the MySuper product dashboard reporting standards.

(2) The period in relation to which the return must be worked out is:

(a) the last 10 whole financial years, if:

(i) the MySuper product has been offered for at least 10 financial years; or

(ii) the MySuper product and a predecessor product have been offered for a total of at least 10 financial years; or

(b) the offering period.

Lifecycle MySuper product

(3) The return for a lifecycle MySuper product must be worked out in relation to each lifecycle stage of the product in accordance with the MySuper product dashboard reporting standards.

(4) The period in relation to which the return in relation to a lifecycle stage of a lifecycle MySuper product must be worked out is:

(a) the last 10 whole financial years, if:

(i) the lifecycle stage of the MySuper product has been offered for at least 10 financial years; or

(ii) the lifecycle stage of the MySuper product and an equivalent stage of a predecessor product have been offered for a total of at least 10 financial years; or

(b) the offering period.

7.9.07T Product dashboard—comparison between return target and return

MySuper product other than lifecycle MySuper product

(1) The comparison between the return target and the return for a MySuper product other than a lifecycle MySuper product must be worked out in accordance with the MySuper product dashboard reporting standards.

(2) The period in relation to which the comparison must be worked out is:

(a) the last 10 whole financial years, if:

(i) the MySuper product has been offered for at least 10 financial years; or

(ii) the MySuper product and a predecessor product, or a lifecycle stage have been offered for a total of at least 10 financial years; or

(b) the offering period.

Lifecycle MySuper product

(3) The comparison between the return target and the return for a lifecycle MySuper product must be worked out in relation to each lifecycle stage of the product in accordance with the MySuper product dashboard reporting standards.

(4) The period in relation to which the comparison in relation to a lifecycle stage of a MySuper product must be worked out is:

(a) the last 10 whole financial years, if:

(i) the lifecycle stage of the MySuper product has been offered for at least 10 financial years; or

(ii) the lifecycle stage of the MySuper product and an equivalent stage of a predecessor product have been offered for a total of at least 10 financial years; or

(b) the offering period.

7.9.07U Comparison to be set out as a graph

(1) A product dashboard must set out a comparison mentioned in regulation 7.9.07T as a graph.

(2) The graph must contain:

(a) a column representing the return for each year in the comparison period; and

(b) a line representing the moving average return target for the comparison period; and

(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.

(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.

Subdivision 2E.2—Making portfolio holding information publicly available

7.9.07Z Kinds of disclosable item for aggregated reporting

(1) For the purposes of subsection 1017BB(1A) of the Act, investment items of a kind described in an item of Table 1 in Schedule 8D to these Regulations are a prescribed kind of disclosable item if the table provides that individual asset names are not required to be disclosed for investments items that meet that description.

Example: Cash assets are required to be organised by the name of the institution and are a prescribed kind of disclosable item as the words “Individual asset names not required to be disclosed” appear immediately below “Name of institution” for cash.

(2) For the purposes of subsection 1017BB(1A) of the Act, investment items of a kind described in an item of Table 2, 3 or 4 in Schedule 8D are a prescribed kind of disclosable item.

7.9.07ZA Way the information must be organised

General rule

(1) For the purposes of subsection 1017BB(3) of the Act, the trustee, or the trustees, of the registrable superannuation entity must organise the information about an investment option in a way that:

(a) is consistent with the tables in Schedule 8D to these Regulations; and

(b) is easily downloadable and readable; and

Different rows or columns in tables

(2) For the purposes of paragraph (1)(a), when organising the information about an investment option in a way that is consistent with the tables in Schedule 8D, the tables used for the investment option may have a different number of rows or columns from those in the tables in that Schedule.

Using subsidiary tables

(3) Subregulation (1) does not prevent the information about the investment option from being expressed in a table that:

(a) deals only with the investment option; and

(b) makes use of one or more subsidiary tables;

if all of the information referred to in Schedule 8D is readily accessible from that combination of tables.

Subdivision 2E.3—Additional obligations to provide information

7.9.07ZB Obligation to provide information to the holder of a superannuation product via website

(1) This regulation is made for the purposes of paragraph 1017DA(1)(a) of the Act.

(2) The trustee of a superannuation entity (other than an entity referred to in subparagraph (b)(i), (ii) or (iii) of the definition of registrable superannuation entity in section 9 of the Act or a self managed superannuation fund) must provide the holder of a superannuation product (being an interest in that entity) with the information, relating to the entity and any relevant sub‑plan (within the meaning of section 1017C of the Act), specified in an item in the table in subregulation (3).

(3) Subject to subregulations (5) to (7), the information specified in an item in the following table must be provided by making it publicly available on the entity’s website from:

(a) if, immediately before the day Schedule 6 to the Treasury Laws Amendment (2022 Measures No. 4) Act 2023 commences, the information was required under paragraph 29QB(1)(b) of the SIS Act to be made publicly available—the time the Treasury Laws Amendment (Financial Reporting and Auditing of Registrable Superannuation Entities) Regulations 2023 commences; or

(b) otherwise—the time specified in that item.

If that item specifies an end time, the trustee is not required to provide the information after that time.

Information to be provided
Item	Information	Time from which information must be made publicly available
1	The current trust deed and any material not incorporated in the current version of the trust deed	Either: (a) no later than 20 business days after the deed or material begins to apply; or (b) if the deed or material is amended or replaced—the later of: (i) the date of the amendment or replacement; and (ii) the effective date of the amendment or replacement
2	The governing rules	Either: (a) no later than 20 business days after the governing rules begin to apply; or (b) if the governing rules are amended or replaced—the later of: (i) the date of the amendment or replacement; and (ii) the effective date of the amendment or replacement
3	The rules relating to the nomination, appointment and removal of the trustee or a director of the trustee	Either: (a) no later than 20 business days after the rules begin to apply; or (b) if the rules are amended or replaced—the later of: (i) the date of the amendment or replacement; and (ii) the effective date of the amendment or replacement
4	The most recent actuarial report, provided in relation to the entity under a provision of the RSE licensee law, for each defined benefit fund or each defined benefit sub‑fund in each defined benefit fund	For each report, no later than 20 business days after the trustee receives the report
5	The most recent Product Disclosure Statement, Supplementary Product Disclosure Statement or Replacement Product Disclosure Statement, for the product	No later than 20 business days after the statement is first given to a person in respect of a recommendation, issue or sale of the product
6	If on 31 August in the current financial year both of the following circumstances exist: (a) APRA has given the trustee a notification of a determination under subsection 60C(2) of the SIS Act that the requirement in subsection 60D(1) of that Act has not been met for a Part 6A product (within the meaning of that Act) offered by the entity, in relation to the most recently completed financial year; (b) APRA had not given the trustee a notification of another determination under subsection 60C(2) of the SIS Act that the requirement in subsection 60D(1) of that Act had not been met for the Part 6A product, in relation to the financial year 2 years before the current financial year; a description of those circumstances	From 1 business day after 31 August in the current financial year until 1 business day after 31 August in the following financial year
7	The most recent Financial Services Guide	No later than 20 business days after the Financial Services Guide is first given to a person under section 941A or 941B of the Act
8	A summary of each change or event that the holder has been notified of under section 1017B of the Act in the previous 2 years	No later than 20 business days after the most recent notice is given
9	The register of relevant interests, and the register of relevant duties, provided in relation to the entity under a provision of the RSE licensee law	No later than 20 business days after the end of each period of 3 months ending on 31 March, 30 June, 30 September or 31 December
10	A summary of the conflicts management policy	Either: (a) no later than 20 business days after the policy begins to apply; or (b) if the policy is amended or replaced—the later of: (i) the date of the amendment or replacement; and (ii) the effective date of the amendment or replacement
11	The proxy voting policies	For each policy—either: (a) no later than 20 business days after the policy begins to apply; or (b) if the policy is amended or replaced—the later of: (i) the date of the amendment or replacement; and (ii) the effective date of the amendment or replacement
12	A summary of when, during the previous financial year of the entity, and how the entity has exercised its voting rights in relation to shares in listed companies	No later than 20 business days after the end of the previous financial year
13	If the trustee is a body corporate—the constitution of the body corporate	Either: (a) no later than 20 business days after the constitution begins to apply; or (b) if the constitution is amended or replaced—the later of: (i) the date of the amendment or replacement; and (ii) the effective date of the amendment or replacement
14	The annual financial statement for the previous financial year that the trustee, as a financial services licensee, is required to lodge with ASIC under Part 7.6 of the Act	The day that the annual financial statement is first lodged with ASIC

(4) The information must be:

(a) readily accessible from the entity’s website; and

(b) kept up to date.

Exception—personal information

(5) If:

(a) the trustee is required under subregulations (2) and (3) to make available a document referred to in item 1, 2, 4, 5 or 8 of the table in subregulation (3); and

(b) the document contains personal information in relation to a beneficiary or former beneficiary of the registrable superannuation entity;

the trustee may instead comply with the requirement by making available a version of the document that has been redacted to exclude personal information (within the meaning of the Privacy Act 1988) in relation to a beneficiary or former beneficiary of the registrable superannuation entity.

Transitional exceptions—standard employer‑sponsored sub‑plan

(6) If:

(a) before 1 July 2024, the trustee is required under subregulations (2) and (3) to make available a document referred to in item 1, 2, 4, 5 or 8 of the table in subregulation (3); and

(b) the document only relates to the entity because it relates to a standard employer‑sponsored sub‑plan;

the trustee may instead comply with the requirement by making the document available from 1 July 2024.

(7) If:

(a) before 1 July 2024, the trustee is required under subregulations (2) and (3) to make available a document referred to in item 1, 2, 4, 5 or 8 of the table in subregulation (3); and

(b) the document contains information that only relates to the registrable entity because it relates to a standard employer‑sponsored sub‑plan;

then, until 1 July 2024, the trustee may instead comply with the requirement by making available a version of the document that has been redacted to exclude information that only relates to the registrable entity because it relates to a standard employer‑sponsored sub‑plan.

(8) A standard employer‑sponsored sub‑plan means a segment of a public offer superannuation fund for which each member of the segment is:

(a) a standard employer‑sponsored member; or

(b) a member of a class that is a prescribed class for the purposes of sub‑subparagraph 18(1)(a)(ii)(B) of the SIS Act.

7.9.07ZC Transitional obligation to provide information to the holder of a superannuation product via website

(1) This regulation is made for the purposes of paragraph 1017DA(1)(a) of the Act.

Remuneration details—on commencement

(3) If, immediately before the day Schedule 6 to the Treasury Laws Amendment (2022 Measures No. 4) Act 2023 commences, the trustee was required under paragraph 29QB(1)(a) of the SIS Act to make details of remuneration publicly available, the information is those details.

(4) The information referred to in subregulation (3) must be provided by making it publicly available on the entity’s website throughout the period:

(a) starting on the day the Treasury Laws Amendment (Financial Reporting and Auditing of Registrable Superannuation Entities) Regulations 2023 commences; and

(b) ending on the day before the start of the period referred to in subregulation (6).

The information must be readily accessible from the entity’s website.

Remuneration details—2022‑23 financial year

(5) The information is the details set out in regulation 2M.3.04 in relation to the remuneration of each member of the key management personnel of the superannuation entity for the entity’s 2022‑23 financial year.

(6) The information referred to in subregulation (5) must be provided by making it publicly available on the entity’s website throughout the period:

(a) starting on the day that is 3 months after the later of the following:

(i) the day the Treasury Laws Amendment (Financial Reporting and Auditing of Registrable Superannuation Entities) Regulations 2023 commences;

(ii) the last day of the entity’s 2022‑23 financial year; and

(b) ending on the day before the entity first reports to members under section 314AA of the Act.

The information must be readily accessible from the entity’s website.

Annual report—on commencement

(7) If, immediately before the day Schedule 6 to the Treasury Laws Amendment (2022 Measures No. 4) Act 2023 commences, the trustee was required under paragraph 29QB(1)(b) of the SIS Act to make an annual report publicly available, the information is the annual report.

(8) Subject to subregulation (9), the information referred to in subregulation (7) must be provided by making it publicly available throughout the period:

(a) starting on the day the Treasury Laws Amendment (Financial Reporting and Auditing of Registrable Superannuation Entities) Regulations 2023 commences; and

(b) ending on the day that the entity next provides fund information under regulation 7.9.32.

The information must be readily accessible from the entity’s website.

(9) Subregulations 7.9.07ZB(5) to (7) apply to the requirement under this regulation to provide the information referred to in subregulation (7) of this regulation in the same way subregulations 7.9.07ZB(5) to (7) would apply if the information were a document referred to in item 1 of the table in subregulation 7.9.07ZB(3).

Note: Subregulations 7.9.07ZB(5) to (7) permit later provision of information or provision of redacted information in certain circumstances, for example, in relation to standard employer‑sponsored sub‑plans.

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;

(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

(3) For paragraph 1020G(1)(c) of the Act, if money received under section 1017E of the Act is paid into an account under subregulation 7.8.01(6), Part 7.8 of the Act applies to the money.

Note: See also subregulation 7.8.01(7).

(4) For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if section 1017E of the Act were modified by omitting paragraph 1017E(2)(b) and inserting the following paragraph:

‘(b) any money may be paid into the account, provided that:

(i) money to which this section applies; and

(ii) interest on the amount from time to time standing to the credit of the account;

is identified and held in accordance with all other provisions of this section; and’.

7.9.08A Dealing with interest

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if section 1017E of the Act were modified by adding after subsection 1017E(2C):

‘(2D) In relation to money to which this section applies:

(a) the product provider is entitled to the interest on the account; and

(b) the interest on the account is not required to be paid into the account;

only if the product provider discloses to the person who paid the money that the product provider is keeping the interest (if any) earned on the account.’.

7.9.08B Crediting of payments before money is received

(1) For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if section 1017E of the Act were modified by adding after subsection 1017E(1):

‘(1A) This section also applies to money paid by a product provider in the following circumstances:

(a) the product provider knows, or believes on reasonable grounds, that money (the client’s money) will be paid to the product provider to acquire, or acquire an increased interest in, one or more of the financial products mentioned in paragraph (1)(a) or (b) from the product provider (whether or not the acquisition would be by a person as a retail client);

(b) either:

(i) the financial product or increased interest was offered in this jurisdiction; or

(ii) the application for the financial product or increased interest was made in this jurisdiction; or

(iii) the money will be received in this jurisdiction;

(c) before receiving the client’s money, the product provider pays an equivalent amount of money (the product provider’s money) into an account described in subsection (2).’.

(2) For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if section 1017E of the Act were modified by adding after subsection 1017E(5):

‘(5A) If subsection (1A) applies:

(a) the product provider is not required to comply with this section in relation to the client’s money; and

(b) subsections (2A), (2B), (2C), (2D), (3), (4), (5) and (6) apply to the product provider’s money as if the money had been paid by the person who paid, or is expected to pay, the client’s money.’.

(3) For paragraph 1017E(3)(d) of the Act, money may be taken out of an account if:

(a) the circumstances described in the modified subsection 1017E(1A) of the Act exist; and

(b) after paying the product provider’s money, the product provider becomes aware, or has reasonable grounds to believe, that the client’s money will not be paid.

7.9.08C Money held in trust for a superannuation product or RSA

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:

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

(b) the money is taken to be held in trust by the product provider for the benefit of the person who is entitled to the money.

7.9.08D Statutory funds under the Life Insurance Act 1995

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies in relation to an account mentioned in paragraph 7.9.08(1)(c) of these Regulations as if paragraph 1017E(2)(b) were omitted.

Division 4—Content of Product Disclosure Statements

Subdivision 4.1—Preliminary

7.9.09 Application of this Division

(1) This Division applies in relation to:

(a) superannuation products; and

(b) RSAs; and

(e) a standard margin lending facility; and

(f) a superannuation product to which Subdivision 4.2B of this Division applies; and

(g) a simple managed investment scheme to which Subdivision 4.2C of Division 4 of Part 7.9 applies; and

(h) a simple sub‑fund product to which Subdivision 4.2D of this Division 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 RSAs would reasonably require for the purpose of making a decision whether to acquire the financial product.

Subdivision 4.1A—No Product Disclosure Statement for carbon units, Australian carbon credit units and eligible international emissions units

7.9.09A Application of this 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);

(d) paragraph 1012C(3)(b);

(e) paragraph 1012C(4)(c);

(f) subsection 1012C(6);

(g) section 1013A;

(h) section 1013B;

(i) section 1013C;

(j) section 1013D;

(k) section 1013E;

(l) section 1013F;

(m) section 1013G.

7.9.09C Modification of Act

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its application to a carbon unit, an Australian carbon credit unit or an eligible international emissions unit as set out in Part 19 of Schedule 10A.

Subdivision 4.2A—Form and content of Product Disclosure Statement for standard margin lending facility

7.9.11 Application of this Subdivision

This Subdivision applies to:

(a) a person who is required to prepare a Product Disclosure Statement for a standard margin lending facility; and

(b) a Product Disclosure Statement for a standard margin lending facility.

7.9.11A Provisions of Part 7.7 of Act that do not apply in relation to standard margin lending facility

For paragraph 951C(1)(b) of the Act, section 942DA of the Act does not apply in relation to a standard margin lending facility.

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 standard margin lending facility as security for the facility 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—standard margin lending facility

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its application to a standard margin lending facility as set out in Part 5A of Schedule 10A.

7.9.11D Form and content of Product Disclosure Statement for standard margin lending facility

(1) For modified paragraph 1013C(1)(a) of the Act, a Product Disclosure Statement for a standard margin lending facility 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 standard margin lending facility must be in the form mentioned in Schedule 10C.

7.9.11E Requirements for references to incorporated information for standard margin lending facility

(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 standard margin lending facility, 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

(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 standard margin lending facility can identify the version that is relevant to the standard margin lending facility 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 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

(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 standard margin lending facility

(1) The responsible person for a Product Disclosure Statement for a standard margin lending facility 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.

7.9.11G Requirement to provide copy of Product Disclosure Statement for standard margin lending facility 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 standard margin lending facility 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 standard margin lending facility

(1) For paragraph 1017B(1A)(b) of the Act, a change to the Approved Securities List or current interest rate for a standard margin lending facility is specified.

(2) For paragraph 1017B(3)(c) of the Act, the issuer of the standard margin lending facility 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 standard margin lending facility.

Subdivision 4.2B—Content of Product Disclosure Statement for superannuation product

7.9.11K Application of this Subdivision

(1) This Subdivision applies to:

(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;

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; and

(b) must comply with a requirement under regulation 9.46 of the Superannuation Industry (Supervision) Regulations 1994 in relation to the attribution or transfer.

7.9.11LB Attribution of accrued default amount to MySuper product—modification of significant event notice requirements

If a person:

(a) is an RSE licensee; 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;

(d) any other information that the member needs to understand the attribution or transfer.

7.9.11M Provisions of Part 7.9 of Act that do not apply in relation to superannuation product

(1) For paragraph 1020G(1)(b) of the Act, Subdivision D of Division 2 of Part 7.9 of the Act does not apply in relation to a superannuation product.

(2) If a person:

(a) proposes to prepare a Product Disclosure Statement or a Supplementary Product Disclosure Statement for a superannuation product during the period commencing on the day on which this subregulation commences and ending on 22 June 2012; and

(b) is permitted to decide, in accordance with regulation 4 of the Corporations Amendment Regulations 2010 (No. 5), to prepare the Product Disclosure Statement or Supplementary Product Disclosure Statement in accordance with Subdivision D of Division 2 of Part 7.9 of the Act; and

(c) prepares the Product Disclosure Statement or Supplementary Product Disclosure Statement in accordance with that Subdivision;

the preparation of the Product Disclosure Statement or Supplementary Product Disclosure Statement is taken to be full compliance with all requirements of Part 7.9 of the Act and these Regulations relating to how the Product Disclosure Statement or Supplementary Product Disclosure Statement is to be prepared.

Note: The Corporations Amendment Regulations 2010 (No. 5) amended these Regulations to make new arrangements for the preparation of Product Disclosure Statements for superannuation products, including identifying that Subdivision D of Division 2 of Part 7.9 of the Act would no longer apply. However, the transitional arrangements in subregulations 4(1) to (7) of the Amendment Regulations allowed certain persons to decide to rely on Subdivision D of Division 2 of Part 7.9 of the Act for the purpose of preparing the Product Disclosure Statement.

7.9.11N Modification of Act—superannuation product

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its application to a superannuation product to which this Subdivision applies as set out in Part 5B of Schedule 10A.

7.9.11O Form and content of Product Disclosure Statement for superannuation product

(1) For modified paragraph 1013C(1)(a) of the Act, a Product Disclosure Statement for a superannuation product to which this Subdivision applies must include the information and statements mentioned in Schedule 10D.

(2) For modified paragraph 1013C(1)(b) of the Act, a Product Disclosure Statement for a superannuation product to which this Subdivision applies must be in the form mentioned in Schedule 10D.

7.9.11P Requirements for references to incorporated information for superannuation product

(1) For subsection 1013C(1D) of the Act, as modified by Part 5B of Schedule 10A, this regulation prescribes requirements for applying, adopting or incorporating, in a Product Disclosure Statement for a superannuation product to which this Subdivision applies, a matter contained in writing.

(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—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

(i) identify each version of the matter (by including the date on which the version was prepared) so that a person who, at a particular time, is considering a superannuation product can identify the version that is relevant to the superannuation product at that time; and

(ii) state the date on which a version was prepared in a prominent position at or near the front of the version; and

(d) the responsible person for the Statement must ensure that a person who is relying on the Statement is able to have access to:

(i) the document containing the matter; or

(ii) if there is more than 1 version of the document containing the matter—each version;

reasonably easily and reasonably quickly.

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

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 giving of every matter that is applied, adopted or incorporated in accordance with subregulations (1) to (5).

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.

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 this Subdivision

(1) This Subdivision applies to:

(a) a person that is required to prepare a Product Disclosure Statement for a simple managed investment scheme; and

(b) a Product Disclosure Statement for a simple managed investment scheme.

(2) This Subdivision does not apply to the extent that the simple managed investment scheme relates to a financial product (known as a “quoted product”) which is, or is intended to be, traded on a prescribed financial market.

(3) This Subdivision does not apply to the extent that the simple managed investment scheme relates to a financial product (known as a “stapled security”) to which the following requirements apply:

(a) the product consists of interests in 2 or more financial products;

(b) the interests include at least 1 interest in a registered scheme;

(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 this subregulation commences and ending on 22 June 2012; and

(c) prepares the Product Disclosure Statement or Supplementary Product Disclosure Statement in accordance with that Subdivision;

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 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

(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.

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

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:

(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.

7.9.11Y 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.

(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 4.2D—Content of Product Disclosure Statement for simple sub‑fund products

7.9.11ZA Application of this Subdivision

(1) This Subdivision applies to:

(a) a person that is required to prepare a Product Disclosure Statement for a simple sub‑fund product; and

(b) a Product Disclosure Statement for a simple sub‑fund product.

(2) This Subdivision does not apply to the extent that the simple sub‑fund product is a financial product (known as a “quoted product”) that is, or is intended to be, traded on a prescribed financial market.

(3) This Subdivision does not apply to the extent that the simple sub‑fund product 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 one security in a CCIV;

(d) there are no financial products in the same class as the interests that may be transferred separately.

(4) This Subdivision does not apply to the extent that the simple sub‑fund product is a security in a CCIV (referable to a sub‑fund of the CCIV) and the CCIV has a constitution that provides:

(a) that a member of the sub‑fund may direct that an amount of money corresponding to part or all of the amount invested by the member in the sub‑fund be invested in accessible investments; and

(b) that any distributions to members of the sub‑fund will be determined by reference to amounts received by the CCIV in relation to the accessible investments acquired in accordance with the direction.

7.9.11ZB Provisions of Part 7.7 of Act that do not apply in relation to simple sub‑fund products

For the purposes of paragraph 951C(1)(b) of the Act, section 942DA of the Act does not apply in relation to a simple sub‑fund product to which this Subdivision applies.

7.9.11ZC Provisions of Part 7.9 of Act that do not apply in relation to simple sub‑fund products

For the purposes of 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 sub‑fund product to which this Subdivision applies.

7.9.11ZD Modification of Act—simple sub‑fund products

For the purposes of paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its application to a simple sub‑fund product to which this Subdivision applies as set out in Part 5D of Schedule 10A.

7.9.11ZE Form and content of Product Disclosure Statement for simple sub‑fund products

(1) For the purposes of paragraph 1013C(1)(a) of the Act, as modified by Part 5D of Schedule 10A, a Product Disclosure Statement for a simple sub‑fund product to which this Subdivision applies must include the statements and information mentioned in Schedule 10F.

(2) For the purposes of paragraph 1013C(1)(b) of the Act, as modified by Part 5D of Schedule 10A, a Product Disclosure Statement for a simple sub‑fund product to which this Subdivision applies must be in the form mentioned in Schedule 10F.

7.9.11ZF Requirements for references to incorporated information for simple sub‑fund products

(1) For the purposes of subsection 1013C(1D) of the Act, as modified by Part 5D of Schedule 10A, this regulation prescribes requirements for applying, adopting or incorporating, in a Product Disclosure Statement for a simple sub‑fund product 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

(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 sub‑fund product to which this Subdivision applies can identify the version that is relevant to the simple sub‑fund product 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 one version of the matter—each version;

reasonably easily and reasonably quickly.

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

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:

(b) if a document mentioned in subparagraph (3)(a)(iii) refers to more than one Product Disclosure Statement, 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 person; but

(ii) is not required to name each Product Disclosure Statement of which it forms part.

7.9.11ZG Retention of copies of Product Disclosure Statement for simple sub‑fund products

(1) The responsible person for a Product Disclosure Statement for a simple sub‑fund product 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 7.9.11ZF(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 7.9.11ZF(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.

7.9.11ZH Requirement to provide copy of Product Disclosure Statement for simple sub‑fund products free of charge

(1) For the purposes of paragraph 1015C(5)(a) of the Act, this regulation specifies requirements as to the manner in which a Product Disclosure Statement for a simple sub‑fund 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 4.3—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 RSAs as set out in Part 6 of Schedule 10A.

7.9.13 Offer of superannuation interest without application or eligible application

(1) For paragraph 1016A(4)(a) of the Act, if a trustee of a public offer entity issues a superannuation interest in the entity to a person without first receiving an application, or an eligible application, the trustee is taken not to have contravened section 1016A of the Act if:

(a) the entity is a standard employer‑sponsored fund; and

(b) the person holds the interest as a standard employer‑sponsored member of the entity; and

(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:

(a) for an individual—50 penalty units; and

(b) for a body corporate—500 penalty units.

(3) Subregulation (2) does not apply if the person has a reasonable excuse.

Note: A defendant bears an evidential burden in relation to the matter in subregulation (2) (see subsection 13.3(3) of the Criminal Code).

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

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

7.9.14 Remedies for person acquiring financial product under defective Product Disclosure Statement: superannuation and RSAs

(1) This regulation applies to a financial product:

(a) that is:

(i) a superannuation product to which requirements of the SIS Act relating to preservation rules and cashing restrictions apply; or

(ii) an RSA 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.

(4) For subsection 1016F(6) of the Act, the responsible person must repay the monies as directed.

(5) For subsection 1019B(7) of the Act, if:

(a) a financial product mentioned in this regulation is subject to the nomination of a further superannuation entity or RSA; and

(b) the application in relation to the financial product is not accepted by the nominated superannuation entity or RSA;

the responsible person may rollover or transfer the client’s benefits to an eligible rollover fund.

7.9.14A Treatment of arrangements under which a person can instruct another person to acquire a financial product

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if the definition of instruction in subsection 1012IA(1) of the Act were modified by adding at the end ‘, including a direction to follow an investment strategy mentioned in paragraph 52(4)(a) of the Superannuation Industry (Supervision) Act 1993’.

Subdivision 4.4—Product information for certain insurance products

7.9.14B Product information

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its application in relation to financial products as if:

(a) that Part applied to a financial product mentioned in paragraph 7.1.14(2)(d); and

(b) the following section were inserted after section 1019B of the Act:

‘1019C Information about certain vehicle insurance

(1) This section applies in relation to the issue of a financial product mentioned in paragraph 7.1.14(2)(d) of the Corporations Regulations 2001.

(2) The product issuer of the financial product must, as soon as practicable after issuing the financial product, give the holder of the financial product a statement that contains the information mentioned in paragraphs 1013D(1)(a) and (b) unless:

(a) the product holder already has a statement containing that information; or

(b) the product issuer believes on reasonable grounds that the product holder has already received a statement containing that information.

(3) The product issuer must give the statement in the same way as a Product Disclosure Statement is to be given under subsection 1015C.

(4) The product issuer is not required to comply with any other requirements in Divisions 2 to 6 (inclusive) in relation to the issue of the financial product.

(5) The product issuer must not refuse, or intentionally or recklessly fail, to comply with subsections (2) and (3).

Penalty:

(a) for an individual—50 penalty units; and

(b) for a body corporate—500 penalty units.

(6) Subsection (5) does not apply to the extent that the product issuer has a reasonable excuse.

Note: A defendant bears an evidential burden in relation to the matter in subsection (6A), see subsection 13.3(3) of the Criminal Code.

(7) Divisions 1 and 7 do not apply in relation to the product issuer in relation to the financial product mentioned in paragraph 7.1.14(2)(d) of the Corporations Regulations 2001.’.

Division 4A—General

7.9.14C Labour standards and environmental, social and ethical considerations

For paragraph 1013D(4)(c) of the Act, the more detailed information to be included in a Product Disclosure Statement about the extent to which labour standards or environmental, social or ethical considerations are taken into account in the selection, retention or realisation of an investment is:

(a) a statement that the product issuer does, or does not, take into account labour standards for the purpose of selecting, retaining or realising the investment; and

(b) a statement that the product issuer does, or does not, take into account environmental, social or ethical considerations for the purpose of selecting, retaining or realising the investment; and

(c) if the Product Disclosure Statement includes a statement that the product issuer does take into account labour standards for the purpose of selecting, retaining or realising the investment—a statement outlining:

(i) the standards that the product issuer considers to be labour standards for that purpose; and

(ii) the extent to which the product issuer takes those standards into account in the selection, retention or realisation of the investment; and

(d) if the Product Disclosure Statement includes a statement that the product issuer does take into account environmental, social or ethical considerations for the purpose of selecting, retaining or realising the investment—a statement outlining:

(i) the considerations that the product issuer regards as environmental, social or ethical considerations for that purpose; and

(ii) the extent to which the product issuer takes those considerations into account in the selection, retention or realisation of the investment.

7.9.14D Further statements required in Product Disclosure Statement—financial claims scheme

(1) For paragraph 1013D(1)(k) of the Act, the following further statements must be included in a Product Disclosure Statement that relates to a protected policy issued by a general insurer or a protected account issued by an authorised deposit‑taking institution:

(a) if the Product Disclosure Statement relates to a protected policy—a statement that:

(i) the person entitled to claim under insurance cover under a protected policy may be entitled to payment under the financial claims scheme; and

(ii) access to the scheme is subject to eligibility criteria;

(b) if the Product Disclosure Statement relates to a protected account—a statement that:

(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;

(2) In this regulation:

authorised deposit‑taking institution has the meaning given by subsection 5(1) of the Banking Act 1959.

financial claims scheme means:

(a) the scheme provided for in Division 2AA of Part II of the Banking Act 1959; and

(b) the scheme provided for in Part VC of the Insurance Act 1973.

general insurer has the meaning given by section 11 of the Insurance Act 1973.

protected account has the meaning given by subsections 5(4) to (7) of the Banking Act 1959.

protected policy has the meaning given by subsection 3(1) of the Insurance Act 1973.

7.9.15 More detailed information in Product Disclosure Statement: unauthorised foreign insurer

(1) For paragraph 1013D(4)(c) of the Act, the more detailed information that must be included in a Product Disclosure Statement that relates to a financial product issued by an unauthorised foreign insurer is:

(a) a statement that the product issuer is:

(i) an unauthorised foreign insurer; and

(ii) not authorised under the Insurance Act 1973 to conduct insurance business in Australia; and

(b) a statement that an insurer of that kind is not subject to the provisions of the Insurance Act 1973, which establishes a system of financial supervision of general insurers in Australia; and

(i) the country in which the product issuer is incorporated, and whether the country has a system of financial supervision of insurers; and

(ii) the paid up capital of the product issuer; and

(iii) which country’s laws will determine disputes in relation to the financial product; and

(d) a statement that an insurer of that kind cannot be a declared general insurer for the purpose of Part VC of the Insurance Act 1973, and, if the insurer becomes insolvent, the person will not be covered by the financial claims scheme provided under Part VC of that Act.

(2) In this regulation:

unauthorised foreign insurer means:

(a) an insurer that:

(i) does not have an authority under the Insurance Act 1973 to carry on insurance business; and

(ii) is not a person who, because of section 5 of that Act, is not required to have such an authority; and

(iii) carries on insurance business outside Australia and the external Territories to which the Insurance Act 1973 extends; or

(b) if a direction is in force under section 74 of the Insurance Act 1973—a Lloyd’s underwriter.

7.9.15A Product Disclosure Statements—requirement to state information as amounts in dollars

(1) For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if paragraph 1013D(1)(m) of the Act were modified to read as follows:

‘(m) unless, in accordance with the regulations and a determination by ASIC, information to be disclosed in accordance with paragraphs (b), (d) and (e) must be stated as amounts in dollars.’.

(2) For paragraph 1020G(1)(a) of the Act, an issuer of a financial product does not have to provide the information mentioned in paragraph 1013D(1)(m) of the Act in the form required by that paragraph, in a Product Disclosure Statement prepared before 1 January 2005.

7.9.15B Product Disclosure Statements—disclosure of dollar amounts

(1) For paragraph 1013D(1)(m) of the Act, if ASIC determines that, for a compelling reason, it is not possible to state information to be disclosed in accordance with paragraph 1013D(1)(b), (d) or (e) as an amount in dollars, the information may be set out as a description of the benefit, cost, amount or payment as a percentage of a specified matter (including worked dollar examples, unless that is inappropriate).

(2) For paragraph 1013D(1)(m) of the Act, if ASIC determines that, for a compelling reason, it is not possible to state information to be disclosed in accordance with paragraph 1013D(1)(b), (d) or (e) as an amount in dollars, or to describe the amount as a percentage, the information may be set out as a description of the method of calculating the benefit, cost, amount or payment (including worked dollar examples, unless that is inappropriate).

(3) A determination under subregulation (1) or (2) must be:

(a) in writing; and

(b) published in the Gazette.

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

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

the information may be set out as a description of the method of calculating the charge or benefit (including worked dollar examples, unless that is inappropriate).

(3) A determination under subregulation (1) or (2) must be:

(a) in writing; and

(b) published in the Gazette.

(4) For paragraph 1013D(1)(m) of the Act, for a Product Disclosure Statement that is required in relation to a general insurance product, if:

(a) information is required to be stated in dollars; and

(b) the amount can only be determined:

(i) after the responsible person assesses the risk of the insured; or

(ii) after the insured has nominated desired levels of insurance cover;

the responsible person may comply with the requirement to state the information by either of the ways mentioned in subregulation (5).

(5) For subregulation (4), the responsible person may state the information by:

(a) stating an amount in dollars in the Product Disclosure Statement; or

(b) giving to the insured:

(i) a document containing the information, as soon as practicable (but in any case, not later than 5 business days after the responsible person issues the general insurance product); and

(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;

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);

(d) paragraph 1013D(1)(h);

(e) paragraph 1013D(1)(j);

(f) paragraph 1013D(1)(l).

7.9.15DA Statement or information not included in a Product Disclosure Statement

(1) For paragraph 1020G(1)(c) of the Act, and subject to subregulation (1A) and (4), a responsible person is not required to include a statement or information mentioned in Part 7.9 of the Act in a Product Disclosure Statement if:

(a) the statement or information is in writing and is publicly available in a document other than the Product Disclosure Statement; and

(b) the Product Disclosure Statement:

(i) refers to the statement or information; and

(ii) provides sufficient details about the statement or information to enable a person:

(A) to identify by a unique identifier the document, or part of the document, that contains the statement or information; and

(B) to locate the statement or information; and

(iii) states that a copy of the statement or information may be obtained from the responsible person on request, at no charge; and

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

(a) a standard margin lending facility; or

(b) a superannuation product to which Subdivision 4.2B of Division 4 of this Part applies; or

(d) a simple sub‑fund product to which Subdivision 4.2D of Division 4 of this Part applies.

(2) If the client requests a copy of the statement or information that the responsible person is not required to include in accordance with subregulation (1), the responsible person must provide the copy as soon as practicable, at no charge.

(3) If a statement or information is not included in a Product Disclosure Statement because of subregulation (1), the statement or information is taken to be included in the Product Disclosure Statement.

(4) Despite subregulation (3), if a responsible person does not include a statement or information in a Product Disclosure Statement in accordance with subregulation (1), the responsible person must include the following information in the Product Disclosure Statement:

(a) for information required by paragraph 1013D(1)(b) or (f) of the Act—a description, in summary, of the purpose and key features of the product;

(b) for information required by paragraph 1013D(1)(c) of the Act—a description, in summary, of the key risks of the product;

(i) paragraphs 1013D(1)(a), (g) and (i) of the Act; and

(ii) Divisions 1 and 2 of Part 2 of Schedule 10; and

(iii) paragraphs 209(e) and (h) of Division 4 of Part 2 of Schedule 10; and

(iv) Divisions 5 and 6 of Part 2 of Schedule 10;

(d) the Consumer Advisory Warning in Division 7 of Part 2 of Schedule 10.

7.9.15DB Requirement to keep record of Product Disclosure Statement and other documents

(1) If section 1015B of the Act does not require a copy of a Product Disclosure Statement to be lodged with ASIC, the Statement and a document, or part of a document, mentioned in the Statement must be retained by the responsible person for that Statement for 7 years after the date of the Statement.

(2) This regulation does not apply if the Product Disclosure Statement is for:

(a) a standard margin lending facility; or

(b) a superannuation product to which Subdivision 4.2B of Division 4 of this Part applies; or

(d) a simple sub‑fund product to which Subdivision 4.2D of Division 4 of this Part 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 standard margin lending facility; or

(b) a superannuation product to which Subdivision 4.2B of Division 4 of this Part applies; or

(d) a simple sub‑fund product to which Subdivision 4.2D of Division 4 of this Part applies.

7.9.15E More detailed information in product disclosure statement: general insurance product

For paragraph 1013D(4)(c) of the Act, the more detailed statement of the information, for paragraph 1013D(1)(f), that must be included in a Product Disclosure Statement that relates to a general insurance product is:

(a) the terms and conditions of the policy document (within the meaning of the Insurance Contracts Act 1984) being terms and conditions that are not provided in a Schedule to the policy document; and

(b) information that, if the issuer were seeking to rely on subsection 35(2) and section 37 of the Insurance Contracts Act 1984, the issuer would have had to provide to the insured before the contract of insurance was entered into.

7.9.15F Product disclosure statement: general insurance product

For paragraph 1020G(1)(b) of the Act, Part 7.9 of the Act applies to general insurance products as if subparagraph 1013C(1)(a)(ii) and section 1013E were omitted.

7.9.15FA Transitional arrangements for regulations 7.9.15D, 7.9.15E and 7.9.15F

(1) If, at any time during the transition period, a Product Disclosure Statement for a general insurance product complies with the requirements of old sections 1013C and 1013D, the Product Disclosure Statement is taken to comply with the requirements of:

(a) sections 1013C and 1013D of the Act; and

(b) the provisions of any regulations made for the purposes of, or modifying, sections 1013C and 1013D of the Act;

as in force at that time.

(2) In this regulation:

commencing day means the day on which this regulation commences.

old sections 1013C and 1013D means:

(a) sections 1013C and 1013D of the Act; and

(b) the provisions of any regulations made for the purposes of, or modifying, those sections;

as in force immediately before the commencing day.

transition period means the period starting on the commencing day and ending at the end of 30 June 2008.

Note: Before the commencement of this regulation, transitional arrangements in similar terms were provided for regulations 7.9.15D, 7.9.15E and 7.9.15F by item 2 of Schedule 5 to the Corporations Amendment Regulations 2005 (No. 5) (SLI 2005 No. 324).

7.9.15H New section 1012G: product disclosure statement may sometimes be provided later

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if section 1012G were omitted and the following section were substituted:

“1012G Product disclosure statement may sometimes be provided later: financial products subject to a cooling off period

Application of section

(1) The regulated person may deal with a financial product under this section only if the financial product is one for which an application form is not required under section 1016A and section 1019B (cooling off period) will apply if the client enters into a legal obligation to acquire the product pursuant to the recommendation or offer that constitutes the relevant conduct.

No need to give Product Disclosure Statement in certain circumstances

(2) In a recommendation situation or an issue situation, the regulated person need not give the client a Product Disclosure Statement for the financial product at or before the time when it would otherwise be required to be given if:

(a) the client expressly instructs the regulated person that they require:

(i) in a recommendation situation—the advice constituting the recommendation; or

(ii) in an issue situation—the financial product;

to be provided or issued immediately, or by a specified time; and

(b) it is not reasonably practicable, while complying with the client’s instructions, to give the client the Product Disclosure Statement at or before the time when it would otherwise be required to be given.

The regulated person must comply instead with subsection (3).

Requirements to be complied with to be able to give Product Disclosure statement later

(3) The regulated person must:

(a) at or before the time referred to in paragraph (2)(b), orally communicate the following information to the client:

(i) the name and contact details of the issuer of the financial product;

(ii) information about the cooling off regime that applies in respect of acquisitions of the product (whether this regime is provided for by law or otherwise);

(iii) that the client should consider the information in the Product Disclosure Statement that will be provided to the client;

(iv) the further information (if any) requested by the client in response to a question under paragraph (b); and

(b) at or before the time referred to in paragraph (2)(b), ask the client whether the client would like further information about the financial product; and

(c) give the client the Product Disclosure Statement as soon as practicable after that time, and in any event not later than:

(i) the time when the confirmation requirement (if applicable) is complied with; or

(ii) the end of the fifth business day after the day on which the financial product was issued or sold to the client.

How information to be communicated

(4) The information referred to in paragraph (3)(a) must be communicated in a clear, concise and effective manner.

How confirmation requirement to be complied with

(5) For the purposes of subparagraph (3)(c)(i), the confirmation requirement is complied with when:

(a) the client receives confirmation, as mentioned in paragraph 1017F(5)(a), of the transaction by which they acquired the financial product; or

(b) confirmation of that transaction is available to the client by a facility as mentioned in paragraph 1017F(5)(b).”

7.9.15I Modification of section 1012IA

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if subparagraph 1012IA(4)(b)(ii) were omitted and the following subparagraph was inserted:

“(ii) subsection 1012G(3) applies in relation to the provider, the client and the regulated acquisition as if the reference to the regulated person were instead a reference to the provider, as if subparagraph 1012G(3)(c)(i) were omitted and as if the reference in subparagraph 1012G(3)(c)(ii) to the day on which the financial product was issued or sold to the client were instead a reference to the day on which the regulated acquisition occurs.”

7.9.16 More detailed information in Product Disclosure Statement: consumer credit insurance product

(1) For paragraph 1013D(4)(c) of the Act, the more detailed information that must be included in a Product Disclosure Statement that relates to a consumer credit insurance product is:

(a) a brief explanation of the purposes of consumer credit insurance; and

(b) an outline statement of general areas covered by the consumer credit insurance product, or the kind of consumer credit insurance product; and

(c) a statement that it is important that the insured read the Product Disclosure Statement carefully to understand the extent of cover provided by the consumer credit insurance product, and its limitations; and

(d) if all of the following matters apply under the consumer credit insurance product:

(i) a person who applies for, or obtains, consumer credit insurance is not obliged to buy the consumer credit insurance;

(ii) cover is provided under the consumer credit insurance product in respect of losses caused by certain contingencies;

(iii) the extent of loss to the consumer credit insurance product applies is measured by reference to the liability of the insured under the credit agreement to which the consumer credit insurance applies;

a statement to that effect, accompanied by examples of the contingencies; and

(e) a table of the benefit limits applicable under the consumer credit insurance product; and

(f) a statement that the insured:

(i) is required to be truthful; and

(ii) is able to arrange consumer credit insurance through a different insurer; and

(g) a statement of the commission paid or payable in relation to the provision of the consumer credit insurance product.

(2) In this regulation:

consumer credit insurance product means a general insurance product provided by a class of contracts of insurance that is:

(a) declared, in accordance with the Insurance Contracts Act 1984 to be a class of contracts to which Division 1 of Part V of that Act applies; and

(b) identified as consumer credit insurance as part of that declaration.

7.9.16A Small scale offerings of managed investment and other prescribed financial products (20 issues or sales in 12 months)

For paragraph 1012E(1)(b) of the Act, interests in financial products covered by paragraph 764A(1)(ba) of the Act (which deals with financial products in relation to certain managed investment schemes that are not registered schemes) are prescribed.

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

(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.

Division 4C—Fee Disclosure for certain financial products

Subdivision 4C.1—Application

7.9.16J Application of this Division to financial products

This Division applies to:

(a) superannuation products other than:

(i) self managed superannuation funds; and

(ii) superannuation products that have no investment component (also known as risk‑only superannuation products); and

(iii) annuities (except market‑linked annuities); and

(iv) non‑investment or accumulation life insurance policies offered through a superannuation fund; and

(b) managed investment products; and

(d) securities in a CCIV.

7.9.16JA Application of this Division 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 this Division to periodic statements and Product Disclosure Statements

This Division applies:

(a) in relation to superannuation products:

(i) to periodic statements (other than exit statements) in relation to a reporting period commencing on or after 1 July 2005; and

(ii) to periodic statements that are exit statements issued on or after 1 July 2006; and

(iii) to Product Disclosure Statements issued on or after 1 July 2005; and

(b) in relation to managed investment products:

(i) to periodic statements (other than exit statements) in relation to a reporting period commencing on or after 1 July 2006; and

(ii) to periodic statements that are exit statements issued on or after 1 July 2007; and

(iii) to Product Disclosure Statements issued on or after 1 July 2006; and

(i) to periodic statements (including exit statements) in relation to a reporting period commencing on or after 1 July 2022; and

(ii) to Product Disclosure Statements issued on or after 1 July 2022.

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 standard margin lending facility; or

(b) a superannuation product to which Subdivision 4.2B of Division 4 of this Part applies; or

(d) a simple sub‑fund product to which Subdivision 4.2D of Division 4 of this Part applies.

7.9.16M Modification of section 1015C of the Act

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies in relation to a product mentioned in regulation 7.9.16J as if paragraph 1015C(5)(b) of the Act were modified to omit the words ‘that is to be given in electronic form’.

7.9.16N Presentation, structure and format of fees and costs in Product Disclosure Statements

(1) For paragraph 1015C(5)(b) of the Act, the information required by paragraphs 1013D(1)(d) and (e) of the Act must be set out in a single section of the Product Disclosure Statement (fees section) with the heading ‘Fees and other costs’.

(2) The fees section of a Product Disclosure Statement must include:

(a) the Fees and Costs Template, comprising the template and the additional explanation of fees and costs set out in Part 2 of Schedule 10; and

(b) an example of annual fees and costs and associated notes as set out in Part 2 of Schedule 10; and

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.

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.’.

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;

(d) an RSA.

Subdivision 5.2—Periodic statements for retail clients for financial products that have an investment component: regulated superannuation funds, approved deposit funds 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

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 given to an RSA holder must include the following details:

(a) the contact details of the fund or the RSA provider;

(b) the amount of withdrawal benefit for the member or RSA holder at the start of the reporting period;

(c) the amount of the withdrawal benefit for the member or RSA holder at the end of the reporting period, and the method by which that amount was worked out;

(d) the amount (if any) of the withdrawal benefit for the member or RSA holder, at the end of the reporting period, that consists of preserved benefits;

(e) the amount (if any) of the withdrawal benefit for the member or RSA holder, at the end of the reporting period, that consists of restricted non‑preserved benefits;

(f) the amount (if any) of the withdrawal benefit for the member or RSA holder, at the end of the reporting period, that consists of unrestricted non‑preserved benefits;

(g) if, in providing details of the amount of the withdrawal benefit at the end of the reporting period, a deduction for fees, charges or expenses has been made or might be made—details of the deduction;

(h) if relevant, a statement informing the product holder that:

(i) the information about the withdrawal benefit for the product holder at the end of the reporting period is based on notional amounts that would have been attributable to the product holder if the product holder had disposed of his or her interest in the product on the date shown in the statement; and

(ii) the amounts on which that information is based might change; and

(iii) before disposing of that product, the product holder should seek information from the product issuer on the withdrawal benefit at that time;

(i) a statement informing the product holder that the product issuer is obliged to provide a member with any information that he or she reasonably requires to understand his or her benefit entitlements;

(j) a statement of the way in which a product holder is able to gain access to information in relation to his or her investment in the financial product.

7.9.19A Withdrawal benefit—fees, charges or expenses

(1) For subsection 1017D(5A) of the Act, in providing details of a deduction for fees, charges or expenses in accordance with paragraph 7.9.19(g), the amount must be stated in dollars.

(2) If ASIC determines that, for a compelling reason, it is not possible to state the amount of a deduction in dollars the amount of the deduction may be set out as a description of the fees, charges or expenses as a percentage of a specified matter (including worked dollar examples, unless that is inappropriate).

(3) If ASIC determines that, for a compelling reason, it is not possible to state the amount of a deduction in dollars, or to set out the amount as a percentage, the product issuer may provide:

(a) a statement informing the holder of the product that amounts for fees, charges or expenses are applicable; and

(b) if information about access to the information about the amount of the deduction is not provided in the statement mentioned in paragraph 7.9.19(h)—details of the means by which a product holder can gain access to information relating to the amount of the deduction.

(4) A determination under subregulation (2) or (3) must be:

(a) in writing; and

(b) published in the Gazette.

7.9.19B Withdrawal benefit—fees, charges and expenses

(1) For subsection 1017D(5A) of the Act, this regulation applies to details of a deduction for fees, charges or expenses in accordance with paragraph 7.9.19(g).

(2) If ASIC determines that, for a compelling reason based on the nature of a financial product or service, or the nature of the information, to state the information as an amount in dollars:

(a) would impose an unreasonable burden on a product issuer, or a class of product issuers; or

(b) would impose an unreasonable burden on a product issuer, or a class of product issuers, within a period specified in the determination; or

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

the product issuer must provide the information in subregulation (4).

(4) If subregulation (3) applies, the product issuer must provide:

(a) a statement informing the product holder that amounts for fees, charges or expenses are applicable; and

(b) if information about access to the information is not provided in the statement mentioned in paragraph 7.9.19(i)—details of the means by which a product holder can gain access to information relating to the amount of the deduction.

(5) A determination under subregulation (2) or (3) must be:

(a) in writing; and

(b) published in the Gazette.

7.9.20 Specific requirements for certain periodic statements: superannuation funds (other than self managed superannuation funds)

(1) For paragraph 1017D(5)(g) of the Act, a periodic statement for a member of a fund (other than a self managed superannuation fund) must include the following details:

(a) the amount of the member’s contributions during the reporting period;

(b) the amount of benefits rolled‑over or otherwise transferred into the fund during the reporting period;

(d) the information about costs of transactions mentioned in regulation 7.9.75;

(e) the amount of any allotment of employer contributions during the reporting period;

(f) the amount of any allotment of net earnings during the reporting period (including, for a unitised product, the presentation of changes in price as amounts in dollars);

(g) the rate of any allotment of net earnings during the reporting period;

(h) the amount of bonuses that have accrued at the end of the reporting period;

(i) the amount of the sum assured;

(j) the amount payable in the event of the member’s death:

(i) at the end of the reporting period; or

(ii) on the first day of the next reporting period;

or the method by which that amount is worked out;

(k) for a reporting period (within the meaning of subsection 1017D(2) of the Act) commencing before 1 July 2004—details, including the amount or method of working out, of other significant benefits, including, in particular, disability benefits;

(ka) for a reporting period (within the meaning of subsection 1017D(2) of the Act) commencing on or after 1 July 2004:

(i) details of other significant benefits, including disability benefits, and the amount of the benefits at the end of the reporting period, or the method of working out the amount of the benefits; and

(ii) if the periodic statement includes an amount mentioned in subparagraph (i)—a statement informing the holder of the product that:

(A) the details of the significant benefit reflects the situation for the member on the date shown in the statement and the amount might change; and

(B) the issuer is obliged to provide product holders with any information they reasonably require for the purpose of understanding their benefit entitlements; and

(iii) details of the means by which a product holder is able to gain access to information relating to the amount of a significant benefit;

(kb) if, in providing details of other significant benefits for a reporting period, a deduction for fees, charges or expenses has been made or might be made—details of the deduction;

(l) if the trustee is aware, or ought reasonably to be aware, of contributions that are due and payable during the reporting period but have not been paid to the fund at, or shortly before, the date of issue of the report, details of the amount of those contributions and of action that the trustee has taken, or proposes to take, to have the contributions paid;

(m) the net amount of Government co‑contribution received during the reporting period;

(n) for a regulated superannuation fund—a statement of long‑term returns, in accordance with regulation 7.9.20AA, of:

(i) the MySuper product or investment option within a choice product in which a member is invested; or

(ii) the sub‑plan, or, if none, the fund in which the member holds an interest;

(o) for a regulated superannuation fund, if the trustee is required to make publicly available a product dashboard for the investment option, under section 1017BA of the Act—the latest product dashboard for the investment option.

(2) For paragraph (1)(g), if the earnings rate for members of the fund is reflected in the price of units of the fund, rather than being credited or debited against the accounts of members, an earnings rate allotted to members in respect of a period is taken to be a change in the value of the members’ units being determined by the trustee in respect of that period.

(2A) For paragraph (1)(m), the periodic statement may state separately:

(a) the amount of Government co‑contributions received; and

(b) the amount of low income superannuation contributions received; and

Note: See section 12B of the Superannuation (Government Co‑contribution for Low Income Earners) Act 2003 for the way in which a law that applies in relation to a Government co‑contribution applies in relation to a low income superannuation tax offset.

(3) A nil amount need not be disclosed.

7.9.20AA Specific requirements for certain periodic statements: superannuation funds (other than self managed superannuation funds)—long‑term returns

(1) For paragraph 7.9.20(1)(n), this regulation sets out requirements that apply to a trustee of a regulated superannuation fund (other than a self managed fund).

(1A) This regulation does not apply if:

(a) the superannuation product is a non‑investment or accumulation life insurance policy that is offered through the regulated superannuation fund; or

(b) the superannuation product has no investment component (also known as a risk‑only superannuation product); or

(c) the statement is a periodic statement to be given to a member of the regulated superannuation fund for a reporting period mentioned in paragraph 1017D(2)(d) of the Act.

(8) The trustee must provide the following, in the periodic statement for a reporting period that is provided from 1 July 2011, 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 the last financial year or reporting period before the provision of the periodic statement; and

(b) the compound average effective rate of net earnings of the sub‑plan or fund for the period of 10 years ending at the end of that financial year or reporting period.

(11) The trustee must include in the periodic statement, near to the statement of long‑term returns, a statement to the effect that the returns are not the returns of the member’s investment in the investment option, sub‑plan or fund.

General requirements

(12) For subregulations (3), (4), (9) and (10), if the investment option, sub‑plan or fund has been in operation for less than the 5‑year or 10‑year period to be reported on, the trustee must provide:

(a) the long‑term return for the period in which the investment option, sub‑plan or fund has been in operation; and

(b) the date on which the investment option, sub‑plan or fund came into operation.

(13) If the long‑term returns are provided in the periodic statement, they must be positioned near to the statement of the rate of any allotment of earnings during the reporting period.

(14) The long‑term returns must be presented in a clear, concise and effective manner.

7.9.20A Details of other significant benefits—disclosure of fees, charges or expenses

(1) For subsection 1017D(5A) of the Act, in providing details of a deduction for fees, charges or expenses in accordance with paragraph 7.9.20(1)(kb):

(a) the amount must be stated in dollars; or

(b) if ASIC determines that, for a compelling reason, it is not possible to state the amount of a deduction in dollars the amount of the deduction may be set out as a description of the fees, charges or expenses as a percentage of a specified matter (including worked dollar examples, unless that is inappropriate); or

(c) if ASIC determines that, for a compelling reason, it is not possible to state the amount of a deduction in dollars, or to set out the amount as a percentage, the product issuer may provide:

(i) a statement informing the holder of the product that amounts for fees, charges or expenses are applicable; and

(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

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

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.

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;

(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;

(i) other superannuation arrangements that may provide a greater return over the long term; and

(ii) seeking advice on alternative investment arrangements that may be more suitable.

(2) For paragraph 1017D(5)(g) of the Act, and in addition to regulation 7.9.19, a periodic statement for an RSA holder must include the following details:

(a) a statement that outlines the effect of the lower‑risk/lower‑return nature of the product on possible benefits in the long term;

(b) a suggestion that the RSA holder may wish to consider:

(i) other superannuation arrangements that may provide a greater return over the long term; and

(ii) seeking advice on alternative investment strategies that may be more suitable.

7.9.23 Information for capital guaranteed fund: benefits reach $10 000

For paragraph 1017D(5)(g) of the Act, and in addition to regulations 7.9.19 and 7.9.22, if the amount of the benefits of a member in a capital guaranteed fund at the end of a reporting period is at least $10 000, the periodic statement for that reporting period must include the following details:

(a) a statement of that fact;

(b) a statement that the information contained in the periodic statement is important and that the notice must be read carefully;

(c) a statement that outlines the effect of the lower‑risk/lower‑return nature of the product on possible benefits in the long term;

(d) a statement that the member may wish to consider:

(i) other superannuation arrangements that may provide a greater return over the long term; and

(ii) seeking advice on alternative investment arrangements that may be more suitable.

7.9.24 Modification of Act: pensioners, members subject to compulsory protection of small amounts and members with small amounts that are expected to grow quickly

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its application in relation to a superannuation entity or an RSA to which this Subdivision applies as set out in Part 7 of Schedule 10A.

Subdivision 5.3—Periodic statements for retail clients for financial products that have an investment component: information for RSAs

7.9.25 Application of Subdivision 5.3

This Subdivision applies in relation to an RSA provider.

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;

(d) the amount of withdrawals during the reporting period;

(e) information about the cost of transactions mentioned in Division 8;

(f) the amount of interest credited to the RSA during the reporting period;

(g) the annual effective rate of net interest applied to the RSA during the reporting period;

(h) a statement of:

(i) the annual effective rate of net earnings in each of the most recent reporting periods that, in total, constitute a period of at least 5 years; and

(ii) the compound average effective rate of net earnings for the period of 5 years ending at the end of the reporting period;

(i) the effect of the RSA holder‑protection standards under the RSA Regulations;

(j) the amount of bonuses that have accrued at the end of the reporting period;

(k) if a risk insurance product is held by the RSA provider—the amount of the sum assured;

(l) the circumstances when benefits may be paid to an eligible rollover fund, the effect of that payment and the contact details of the eligible rollover fund;

(m) the amount payable in the event of the RSA holder’s death:

(i) at the end of the reporting period; or

(ii) on the first day of the next reporting period;

or the method by which that amount is worked out;

(n) the amount, or method of working out, of other benefits including, in particular, disability benefits;

(o) if the RSA provider reduced the RSA holder’s benefits in connection with payment of a superannuation contributions surcharge or an advance instalment of surcharge:

(i) the amount deducted; and

(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.

7.9.27 Modification of Act: periodic statements for RSA holders

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its application in relation to an RSA to which this Subdivision applies as set out in Part 8 of Schedule 10A.

7.9.28 Information for RSA: amount reaches $10 000

For paragraph 1017D(5)(g) of the Act, if the amount of an RSA at the end of a reporting period is at least $10 000, the periodic statement for that reporting period must include the following, in addition to the details mentioned in regulations 7.9.19 and 7.9.22:

(a) a statement of that fact;

(b) a statement that the information contained in the periodic statement is important and that the notice must be read carefully;

(c) a statement that outlines the effect of the lower‑risk/ lower‑return nature of the RSA on possible benefits in the long term;

(d) a suggestion that the RSA holder may wish to consider:

(i) other superannuation arrangements that may provide a greater return over the long term; and

(ii) seeking advice on alternative investment strategies that may be more suitable.

Subdivision 5.4—Periodic statements for retail clients for financial products that have an investment component: additional information for superannuation entities and RSA providers

7.9.29 Application of Subdivision 5.4

This Subdivision applies in relation to a superannuation entity and an RSA provider.

7.9.30 Additional information for change to choices

(1) For paragraph 1017D(5)(g) of the Act, a periodic statement for a holder of a financial product must include, if relevant, either of the following details (in addition to the details mentioned in regulation 7.9.20 or 7.9.26, as appropriate):

(a) details of:

(i) other investment strategies available to the holder (if applicable); and

(ii) other contribution levels available to the holder; and

(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.

(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;

(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.

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

7.9.31A Trustee of superannuation entity must provide fund information to holders of interests in the entity

For the purposes of paragraph 1017DA(1)(a) of the Act, the trustee of a superannuation entity must provide the holder of a superannuation product (being an interest in that entity) with the following fund information relating to the entity and any relevant sub‑plan (within the meaning of section 1017C of the Act):

(a) if the entity is not a self managed superannuation fund—the name and ABN of each outsourced service provider that has provided, at any time in the previous 12 months, a service which may affect a material business activity of the entity;

(b) if the entity is not a self managed superannuation fund—the following information about each member of the key management personnel of the entity:

(i) the member’s name;

(ii) the member’s qualifications;

(iii) a summary of the member’s experience as a trustee or board member, including the periods during which the member served as a trustee or board member;

(c) if the entity is not a self managed superannuation fund—the record of attendance at board meetings for each director of the entity for:

(i) the last 7 financial years; or

(ii) if a director has served for a period of less than 7 years—that period;

(d) the fund information specified in Subdivisions 5.6 and 5.7 of this Division that is applicable to the entity.

7.9.32 Fund information must be provided for each fund reporting period

(1) For the purposes of subsection 1017DA(1) of the Act, fund information must be provided, in accordance with this regulation, to the product holder, 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;

(3) Fund information for a fund reporting period must be provided as soon as practicable after, and in any event within 6 months after, the end of the reporting period.

(5) Fund information in relation to a particular product holder need not all be provided in respect of the same fund reporting period.

Fund information must be provided on website and, if holder elects, in hard copy or electronic copy

(6) The trustee must provide fund information for a fund reporting period to a product holder:

(a) by making the fund information publicly available on the superannuation entity’s website; and

(b) if the holder elects to have a hard copy or electronic copy of the fund information—by sending the fund information to the holder, in that form, until the holder notifies the trustee that a hard copy or electronic copy is no longer required.

(7) Fund information for a fund reporting period must be readily accessible from the entity’s website.

(8) Subregulations (6) and (7) do not apply to a self managed superannuation fund.

7.9.33 Use of more than 1 document

For the purposes of subsection 1017DA(1) of the Act, a reference in Subdivisions 5.5 to 5.7 of this Division to 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 fund information 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 approved deposit funds

7.9.34 Application of Subdivision 5.6

This Subdivision applies in relation to:

(a) a regulated superannuation fund; and

(b) an approved deposit fund.

7.9.35 General requirement

Fund information includes 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

Fund information includes 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) Fund information includes 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, 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;

(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;

(f) in respect of the relevant sub‑plan or, if none, of the fund—a statement of assets as at the end of:

(i) the relevant reporting period; and

(ii) the immediately preceding reporting period;

that includes all information that the responsible person reasonably believes a member would reasonably need to understand the asset allocation at those times;

(g) details of:

(i) each investment that has a value in excess of 5% of the total assets of the relevant sub‑plan or, if none, of the fund; and

(ii) each combination of investments that the trustee knows or ought reasonably to know are invested in, directly or indirectly, a single enterprise or single group of associated enterprises and that have a combined value in excess of 5% of the total assets of the relevant sub‑plan or, if none, of the fund;

(h) a statement regarding the funds policy toward the use of derivative securities;

(i) if the derivatives charge ratio of the fund (as defined in the SIS Regulations) exceeded 5% at any time during the reporting period:

(i) the derivatives charge ratio as at the end of the reporting period; and

(ii) the highest derivatives charge ratio attained during the reporting period; and

(iii) an explanation of why the derivatives charge ratio exceeded 5%; and

(iv) an explanation of the meaning of derivatives charge ratio in, or to the effect of the following:

‘The derivatives charge ratio is the percentage of the total market value of the assets of the fund (other than cash) that the trustee has charged as security for derivatives investments made by the trustee.’;

(k) if the fund maintains reserves—in respect of the relevant sub‑plan or, if none, of the fund, details of movements of reserves during the most recent reporting periods that, in total, constitute at least 3 years;

(l) if the net earnings of the fund are allotted to members’ accounts—in respect of the relevant sub‑plan or, if none, of the fund, the manner in which the allotment is made;

(m) if the fund maintains reserves—in respect of the relevant sub‑plan or, if none, of the fund, a description of the management strategy of the fund trustee in relation to the reserves, having regard to the requirements of paragraph 52(2)(g) of the SIS Act;

(n) details of any penalties imposed on the responsible person under:

(i) section 38A of the SIS Act; or

(ii) section 182 of the RSA Act;

(o) if the fund is:

(i) a defined benefit fund; and

(ii) the contributions paid by the employer‑sponsor in the reporting period are less than the amount that an actuary has approved as sufficient contributions in that period; and

(iii) the difference is material;

in respect of the relevant sub‑plan or, if none, of the fund—a statement to the effect that the matters stated in subparagraphs (ii) and (iii) apply, and statements of:

(iv) the consequences for the fund of the shortfall; and

(v) any action that the trustee has taken, or proposes to take, in relation to the matter;

(p) the ultimate source (including, for example, the fund’s reserves, the members’ accounts or the employer) from which payments in connection with superannuation contributions surcharges or advance instalments of surcharge will be drawn;

(q) if there are circumstances in which the trustee would pay the member’s benefit to an eligible rollover fund:

(i) details of those circumstances; and

(ii) the contact details of the eligible rollover fund; and

(iii) a statement of the effect of the payment of benefits to the eligible rollover fund.

(1A) Subregulation (1) does not apply to a self managed superannuation fund. Fund information for a self managed superannuation fund includes 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.

(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.

7.9.39 Benefits determined by life insurance products

(1) Paragraphs 7.9.37(1)(e), (f) and (g) do not apply to funds from which the benefits paid to each member are wholly determined by reference to life insurance products.

(2) If:

(a) subregulation (1) does not apply only because shares in the life insurance company issuing the life insurance products were acquired because the company was demutualised; and

(b) the shares have been held for not more than 18 months after the date of acquisition;

paragraphs 7.9.37(1)(e), (f) and (g) do not apply to funds from which the benefits paid to each individual member would otherwise be wholly determined by reference to life insurance products.

(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

Fund information includes the following:

(a) in respect of the pooled superannuation trust—a description of the investment strategy of the pooled superannuation trust trustee, having regard to:

(i) the requirements of paragraph 52(2)(f) of the SIS Act; and

(ii) the investment objectives of the pooled superannuation trust;

(b) a statement to the effect that other information is available on request.

7.9.42 Specific requirements in particular cases

(1) Subject to subregulations (2) and (3), fund information includes 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;

(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 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.

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 RSAs

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

(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 an RSA 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 exempt public sector superannuation scheme 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 exempt public sector superannuation scheme, the RSA or the eligible rollover fund; and

(b) so much of the following information as is relevant:

(i) an explanation why the product issuer (the transferor) intends to pay the product holder’s benefits to the eligible rollover fund if the product holder does not make the choice within the period;

(ii) a statement of the effect of the payment of benefits to the eligible rollover fund;

(iii) the contact details of the eligible rollover fund;

(iv) subject to subregulation (3), the amount, of the product holder’s benefits that will be paid from the transferor;

(v) a statement to the effect that, if the product holder chooses a superannuation entity, exempt public sector superannuation scheme 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, exempt public sector superannuation schemes 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.

Subdivision 5.8A—Information in relation to inactive superannuation accounts

7.9.44A Meaning of inactive

In this Subdivision, a member of a regulated superannuation fund has an account that is inactive in relation to a choice product or a MySuper product for a period if the member has an account that is inactive in relation to the product for the period within the meaning of subsection 68AAA(3) of the SIS Act.

7.9.44B Notices about insurance—inactivity

(1) This regulation is made for the purposes of paragraph 1017DA(1)(a) of the Act.

Application

(2) This regulation applies if:

(a) a member of a regulated superannuation fund holds a choice product or a MySuper product offered by the fund; and

(b) the fund provides a benefit to, or in respect of, the member under the product by taking out or maintaining insurance; and

(c) the member has not made an election, under subsection 68AAA(2) of the SIS Act, that the benefit will be provided to, or in respect of, the member under the product by taking out or maintaining insurance even if the member’s account is inactive in relation to the product for a continuous period of 16 months; and

(d) if under the governing rules of the fund the benefit will not be provided to, or in respect of, the member under the product by taking out or maintaining insurance if the member’s account is inactive for a period of less than 16 months—the member has not made an election under the governing rules of the fund that the benefit will be provided in that way even if the member’s account is inactive in relation to the product for that lesser period.

(3) However, this regulation does not apply in relation to:

(a) a defined benefit member; or

(b) an ADF Super member (within the meaning of the Australian Defence Force Superannuation Act 2015); or

(c) a person who would be an ADF Super member apart from the fact that the regulated superannuation fund is or was, for the purposes of Part 3A of the Superannuation Guarantee (Administration) Act 1992, a chosen fund for contributions for the person’s superannuation by the Commonwealth; or

(d) a member to whom the employer‑sponsor contribution exception applies under section 68AAE of the SIS Act.

Insurance inactivity notices

(4) Each trustee of the regulated superannuation fund must ensure that the member is given an insurance inactivity notice in relation to the benefit for each occasion on which one of the following paragraphs is satisfied:

(a) the member’s account has been continuously inactive in relation to the product under which the benefit is provided for a period and, were the member’s account to continue to be inactive in relation to the product for a further period of 7 months, the fund would cease to provide the benefit by taking out or maintaining insurance either under the governing rules of the fund or because of the application of section 68AAA of the SIS Act;

(b) the member’s account has been continuously inactive in relation to the product under which the benefit is provided for a period and, were the member’s account to continue to be inactive in relation to the product for a further period of 4 months, the fund would cease to provide the benefit by taking out or maintaining insurance either under the governing rules of the fund or because of the application of section 68AAA of the SIS Act;

(c) the member’s account has been continuously inactive in relation to the product under which the benefit is provided for a period and, were the member’s account to continue to be inactive in relation to the product for a further period of 1 month, the fund would cease to provide the benefit by taking out or maintaining insurance either under the governing rules of the fund or because of the application of section 68AAA of the SIS Act.

(5) For the purposes of subregulation (4), an insurance inactivity notice in relation to the benefit is a notice in writing given to the member:

(a) stating the length of the continuous period for which the member’s account has been inactive in relation to the product under which the benefit is provided; and

(b) explaining that the member’s account will be active in relation to the product if an amount, such as a contribution, is paid into the account; and

(d) stating:

(i) the amount of insurance fee charged in relation to the product for the fund’s most recent completed year of income; and

(ii) the amount of insurance fee likely to be charged in relation to the product for the fund’s current year of income; and

(e) explaining whether the benefit will cease to be provided:

(i) under the governing rules of the fund; or

(ii) because of the application of section 68AAA of the SIS Act; and

(f) setting out:

(i) whether or not it is possible for the member to elect to continue to be provided the benefit; and

(ii) if it is possible for the member to do so—the method by which the member can make the election.

Time for giving notice

(6) If a trustee of a regulated superannuation fund is required under subregulation (4) to ensure that a member of the fund is given a notice in relation to a benefit provided to the member under a product offered by the fund, the notice must be given:

(a) if paragraph (4)(a) is satisfied—within the period of 2 weeks after the day on which that paragraph is satisfied; and

(b) if paragraph (4)(b) is satisfied—within the period of 2 weeks after the day on which that paragraph is satisfied; and

7.9.44C Notices about insurance—right to cease insurance cover

(1) This regulation is made for the purposes of paragraph 1017DA(1)(a) of the Act.

Application

(2) This regulation applies if:

(a) a member of a regulated superannuation fund holds a choice product or a MySuper product offered by the fund; and

(b) the fund provides a benefit to, or in respect of, the member under the product by taking out or maintaining insurance; and

(i) the member has made an election, under subsection 68AAA(2) of the SIS Act, that the benefit will be provided to, or in respect of, the member under the product by taking out or maintaining insurance even if the member’s account is inactive in relation to the product for a continuous period of 16 months; or

(ii) if under the governing rules of the fund the benefit will not be provided to, or in respect of, the member under the product by taking out or maintaining insurance if the member’s account is inactive for a period of less than 16 months—the member has made an election under the governing rules of the fund that the benefit will be provided in that way even if the member’s account is inactive in relation to the product for that lesser period.

(3) However, this regulation does not apply in relation to:

(a) a defined benefit member; or

(b) an ADF Super member (within the meaning of the Australian Defence Force Superannuation Act 2015); or

(d) a member to whom the employer‑sponsor contribution exception applies under section 68AAE of the SIS Act.

(4) Each trustee of the regulated superannuation fund must ensure that the member is given a notice about rights to cease insurance in relation to the benefit:

(a) within 2 weeks after the day on which the member makes the election mentioned in subparagraph (2)(c)(i) or (ii) in relation to the benefit; and

(b) after the first notice about rights to cease insurance in relation to the benefit is given, at regular intervals of no more than 15 months.

(5) For the purposes of subregulation (4), a notice about rights to cease insurance in relation to a benefit is a notice in writing given to the member:

(a) explaining that the member has elected for the benefit to continue to be provided:

(i) under the governing rules of the fund; or

(ii) because of the application of section 68AAA of the SIS Act; and

(b) stating the date on which, and the manner in which, the member made that election; and

Subdivision 5.9—Information on request: members

7.9.45 Regulated superannuation funds, approved deposit funds 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

(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) the most recent fund information provided under regulation 7.9.32 to product holders of interests in the fund or the trust.

Note: See also Subdivision 2.4.3 of the SIS Regulations in relation to the calculation of derivatives charge ratio (which relates to fund information referred to in regulation 7.9.37 of this instrument).

7.9.46 RSAs

(1) This regulation applies in relation to an RSA.

(2) For paragraph 1017C(5)(a) of the Act, the terms and conditions of the RSA are a prescribed document.

Subdivision 5.10—Information on request: payments

7.9.47 Modification of Act: charges for information requested

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its application in relation to a superannuation entity or an RSA provider as set out in Part 11 of Schedule 10A.

Subdivision 5.12—Periodic report when product holder ceases to hold product: superannuation products and RSAs

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) RSAs.

7.9.50 Meaning of exit reporting period

In this Subdivision, exit reporting period, in relation to a person who ceases to hold a product to which this Subdivision applies, means the reporting period mentioned in paragraph 1017D(2)(d) of the Act.

7.9.51 Time for compliance

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its application in relation to a fund as set out in Part 12 of Schedule 10A.

7.9.52 General requirement

For paragraph 1020G(2)(b) of the Act, subsections 1017D(2) and (4) of the Act are modified, in its application in relation to a person who ceases to hold a superannuation product or an RSA (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, the periodic report given to each person receiving a benefit from the issuer of the product as a result of the person’s death must include:

(a) a statement setting out details (in summary form) of arrangements that the issuer has made to deal with inquiries and information about the dispute resolution system that covers complaints; or

(b) a statement that the details are available on request.

7.9.54 Specific requirements in all cases

For paragraph 1017D(5)(g) of the Act, if a reporting period is the exit reporting period, the issuer of a superannuation product (other than the trustee of a self managed superannuation fund or pooled superannuation trust) must include in the periodic report given to a person who ceases, otherwise than by death to hold the product:

(a) the information mentioned in regulation 7.9.19; and

(b) in relation to a death or disability benefit that ceases or reduces, because the person has ceased to hold the product:

(i) either:

(A) the amount of the death or disability benefit immediately before the person ceased to hold the product or at the end of the last reporting period; or

(B) the method of working out the death or disability benefit; and

(ii) whether a continuation option is available to the person and, if it is, details of the option, a contact person who is available to discuss the option and a telephone number for the contact person.

7.9.55 Specific requirements in particular cases

(1) For paragraph 1017D(5)(g) of the Act, if a reporting period is the exit reporting period, the issuer of a superannuation product (other than the trustee of a self managed superannuation fund or pooled superannuation trust) must include in the periodic report given to a person who ceases, otherwise than by death to hold the product, the information mentioned in regulation 7.9.20.

(2) A nil amount need not be disclosed.

7.9.56 Exceptions to exit reporting period provisions: superannuation products and RSAs

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 ceases to hold the product, a periodic statement must include the following information for the exit reporting period:

(a) the contact details of the product provider;

(b) the amount of the product holder’s withdrawal benefit;

(c) the amount of any deduction, from the product holder’s benefits, in connection with payment of a superannuation contributions surcharge, or an advance instalment of surcharge, during the exit reporting period;

(d) if there is a difference between the amount deducted and the amount assessed under subsection 15(1) of the Superannuation Contributions Tax (Assessment and Collection) Act 1997, or between the amount deducted and the amount determined under subsection 15(2) of that Act—a statement explaining the difference;

(e) for a superannuation product provided by an unfunded defined benefits fund—details of the surcharge debt account kept by the issuer, under subsection 16(2) of the Superannuation Contributions Tax (Assessment and Collection) Act 1997, for the holder including:

(i) the balance of the account at the start of the exit reporting period; and

(ii) the amount debited to the account during the exit reporting period for superannuation contributions surcharge that is assessed, by the Commissioner of Taxation, to be payable on the member’s surchargeable contributions; and

(iii) the amount of interest debited to the account, under subsection 16(4) of that Act, during the exit reporting period; and

(iv) the balance of the account at the end of the exit reporting period.

7.9.58 Information to be given in cases other than death of RSA holder

(1) For paragraph 1017D(5)(g) of the Act, if a reporting period for an RSA is the exit reporting period to which paragraph 1017D(2)(d) of the Act applies for an RSA holder who ceases to be an RSA holder, otherwise than by death:

(a) the RSA provider must give the RSA holder the information mentioned in regulation 7.9.19; and

(b) regulation 7.9.22 does not apply.

(2) A nil amount need not be disclosed.

7.9.59 Information to be given where applicable

(a) the information mentioned in regulation 7.9.26 (other than paragraphs 7.9.26(1)(h), (i), (l) and (m); and

(b) in the case of a death benefit that ceases or reduces, or will cease or reduce, because the person has closed the RSA:

(i) either:

(A) the amount of the death benefit immediately before the person closed the RSA or at the end of the last RSA holder reporting period; or

(B) the method of working out the death benefit; and

(ii) whether a continuation option for insurance cover is available to the person and, if it is, details of the option, a contact person who is available to discuss the option and a telephone number for the contact person.

(2) A nil amount need not be disclosed.

7.9.60 Modification of Act: exceptions to exit reporting period provisions

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its application in relation to an RSA as set out in Part 13 of Schedule 10A.

Division 5AA—General requirements for financial disclosure

7.9.60A Modification of Act: disclosure

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act is modified in its application in relation to the obligation to give information about financial products as set out in Part 14 of Schedule 10A.

7.9.60B Disclosure of transactions in periodic statements

(1) This regulation applies to the following periodic statements:

(a) for a financial product other than a superannuation product, a managed investment product, a foreign passport fund product or an investment life insurance product—a periodic statement in relation to a reporting period commencing on or after 1 July 2005;

(b) for a superannuation product:

(i) if the periodic statement is not an exit statement—a periodic statement in relation to a reporting period commencing on or after 1 July 2005; and

(ii) if the periodic statement is an exit statement—a periodic statement issued on or after 1 July 2006;

(i) if the periodic statement is not an exit statement—a periodic statement in relation to a reporting period commencing on or after 1 July 2006; and

(ii) if the periodic statement is an exit statement—a periodic statement issued on or after 1 July 2007;

(d) for an investment life insurance product:

(i) if the periodic statement is not an exit statement—a periodic statement in relation to a reporting period commencing on or after 1 July 2005; and

(ii) if the periodic statement is an exit statement—a periodic statement issued on or after 1 July 2006.

(2) For paragraph 1017D(5)(c) of the Act, the periodic statement must include a brief description of each transaction in relation to the product during the reporting period.

(3) The amount of a transaction must include, if applicable:

(a) GST; and

(b) stamp duty; and

(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, a managed investment product, a security in a CCIV or a foreign passport fund product, the only fees and costs that need to be itemised in a periodic statement are the fees and costs shown in the fees and costs template for a Product Disclosure Statement in Part 2 of Schedule 10.

(7) The fees and costs mentioned in subsection (6) must be described using the terms used in the template.

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 9 of the Act were modified by inserting the following definition in the appropriate position:

“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 9 of the Act were modified by inserting the following definition in the appropriate position:

“Supplementary Short‑Form Product Disclosure Statement, or Supplementary Short‑Form PDS, has the meaning given by section 1017L.”

Column 1	Column 2	Column 3
Item	Provisions of Act
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.

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

(2) This regulation also applies if:

(a) money is taken out of an account mentioned in subsection 1017E(2) of the Act by a product provider for the purpose of returning it to the person by whom it was paid in compliance with paragraph 1017E(3)(a); and

(b) the product provider is not able to return the money in compliance with subsection 1017E(4).

(3) For paragraph 1017E(3)(d) of the Act, the situations mentioned in subregulations (1) and (2) are situations in which money may be taken out of an account mentioned in section 1017E.

(4) For paragraph 1017E(4)(c) of the Act, the product provider must, after taking the money out of the account:

(a) transfer the money to ASIC to be dealt with under Part 9.7 of the Act; and

(b) give ASIC any information in the possession of the product provider that could reasonably assist ASIC to assess a claim by a person that the person is entitled to the money.

7.9.61B Issue of substitute insurance product

(1) This regulation applies if:

(a) money is paid to acquire an insurance product (the new product); and

(b) the product provider issues another product (the other product) which is the same as the new product except for the date on which it ceases to have effect; and

(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.’.

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 that has been issued to the product holder because of the operation of subsection 52(4) of the RSA Act;

(c) an interest in an eligible rollover fund of which the product holder became a member under section 243 of the SIS Act;

(d) an interest in an eligible rollover fund of which the product holder became a member in the circumstances mentioned in section 89 of the RSA Act;

(e) an interest in a public offer superannuation fund that is not a successor fund if:

(i) the product holder is a standard employer‑sponsored member of the fund; or

(ii) the product holder is a person who became a member of the fund in the circumstances mentioned in regulation 7.9.06B.

(2) Part 7.9 of the Act applies in relation to the financial products as if the following subsection were inserted after subsection 1017F(5A) of the Act:

‘(5B) For a financial product mentioned in regulation 7.9.61D of the Corporations Regulations 2001:

(a) subsection (5A) does not apply if the responsible person in relation to a transaction involving the financial product provides the holder of the financial product with a facility that is able to be accessed by the holder:

(i) by phone; or

(ii) by writing; or

(iii) by another method that the responsible person knows, or reasonably believes, that the product holder is able to use; and

(b) confirmation may be provided by means of the facility mentioned in paragraph (a).’.

(3) Part 7.9 of the Act applies in relation to the financial products as if paragraph 1017F(6)(a) of the Act were replaced by the following paragraph:

‘(a) must be:

(i) by telephone; or

(ii) by writing; or

(iii) by another method that the responsible person knows, or reasonably believes, that the product holder is able to use; and’.

Division 5C—CGS depository interests

7.9.61E Meaning of CGS depository interest information website

For the purposes of the definition of CGS depository interest information website in subsection 1020AH(1) of the Act, the website prescribed is www.australiangovernmentbonds.gov.au.

Division 6—Confirmation of transactions

7.9.62 Confirmation of transactions not required

(1) For paragraph 1017F(4)(e) of the Act, a transaction is not required to be confirmed by the trustee of a superannuation fund, an approved deposit fund 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, approved deposit fund 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;

(i) the holder of the product has been given a periodic statement under section 1017D of the Act not later than 6 months after the transaction occurs; and

(ii) the periodic statement contains the information about the transaction that is required by that section;

(d) crediting an amount to a basic deposit product if:

(i) the holder of the product has been given a periodic statement under section 1017D of the Act not later than 6 months after the transaction occurs; and

(ii) the periodic statement contains the information about the transaction that is required by that section.

(4) For paragraph 1017F(4)(e) of the Act, the following transactions in relation to a financial product are not required to be confirmed:

(a) a transaction that is required or authorised by a law of the Commonwealth or of a State or Territory;

(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;

(i) consisting solely of a withdrawal from the financial product; and

(ii) in relation to which the holder has agreed to the timing and amount, or method of calculating the amount, of the withdrawal;

(d) a transaction:

(i) consisting solely of the acquisition of managed investment products; and

(ii) in relation to which the holder has agreed to the timing and amount, or method of calculating the amount, of the acquisition; and

(iii) in relation to which the holder of the managed investment products, before agreeing to the acquisition, already held or had agreed to acquire managed investment products that were interests in the same registered scheme as the managed investment products that are to be acquired under the agreement;

(da) a transaction:

(i) consisting solely of the acquisition of foreign passport fund products; and

(ii) in relation to which the holder has agreed to the timing and amount, or method of calculating the amount, of the acquisition; and

(iii) in relation to which the holder of the foreign passport fund products, before agreeing to the acquisition, already held or had agreed to acquire foreign passport fund products that were interests in the same notified foreign passport fund as the foreign passport fund products that are to be acquired under the agreement;

(e) a transaction that relates to:

(i) a superannuation product or an RSA; and

(ii) a superannuation surcharge liability for a product holder arising under section 10 of the Superannuation Contribution Tax (Assessment and Collections) Act 1997;

(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, approved deposit fund or pooled superannuation trust account;

(h) a transaction that relates to:

(i) a superannuation product or an RSA; 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

(b) the transaction involves the use of a facility for making non‑cash payments that is linked to the basic deposit product; and

(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

7.9.63 Confirmation of transactions: precise costs of transaction not known

(1) For subparagraph 1017F(8)(c)(iii) of the Act, the confirmation of a transaction of a financial product is not required to include details of the amount payable by the holder of the financial product if the amount is not known at the time of the confirmation.

(2) For subparagraph 1017F(8)(c)(iv) of the Act, the confirmation of a transaction of a financial product is not required to give details of the taxes and stamp duties payable in relation to the transaction if the amount of the taxes and stamp duties is not known at the time of the confirmation.

(3) For paragraph 1017F(9)(c) of the Act, section 1017F of the Act is modified in relation to its application to a transaction of a financial product as set out in Part 15 of Schedule 10A.

7.9.63A Persons who must confirm transactions

(1) For paragraph 1017F(9)(a) of the Act, this regulation modifies subsection 1017F(2) of the Act to change the person required to provide confirmation of a transaction.

(2) A transaction:

(a) that is not the issue of a financial product (other than a derivative that is not a warrant); and

(b) in which a financial services licensee deals in the financial product on behalf of the holder of the financial product; and

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

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

must be confirmed by the issuer of the financial product.

7.9.63B Content of confirmation of transactions—general

(1) For paragraph 1017F(8)(d) of the Act, this regulation applies in relation to a transaction that is the acquisition or disposal of a financial product.

(2) The confirmation of the transaction must identify:

(a) the financial product; and

(b) the number or amount of financial products that are the subject of the transaction.

(3) If the transaction takes place in the ordinary course of business on a licensed market, the confirmation of the transaction must also identify each licensed market of which the responsible person is a participant.

(4) If the responsible person is dealing on their own behalf with a person who is not a financial services licensee, the confirmation of the transaction must also state that the responsible person is dealing in that way.

(5) Subregulation (4) does not apply if:

(a) the transaction is the issue of a product; and

(b) the responsible person is the product issuer.

(6) If:

(a) the financial product is able to be traded on a market in which the responsible person is a participant; and

(b) the transaction did not take place in the ordinary course of business on a licensed market in which the responsible person is a participant;

the confirmation of the transaction must also include a statement to that effect.

(7) If the transaction took place on‑market, the confirmation of the transaction must also include the name by which that market is generally known.

(8) If the transaction involves more than one financial product, the confirmation of the transaction must also include the price per unit of the financial products.

(9) For paragraph 1017F(9)(c) of the Act, paragraph 1017F(8)(a) of the Act is modified in its application to a transaction involving a basic deposit product (other than an acquisition or disposal of the product) by omitting ‘and the holder’.

7.9.63C Confirmation of transaction—multiple transactions

(1) For paragraph 1017F(9)(b) of the Act, subregulation (2) applies in relation to a transaction if:

(a) the responsible person is a participant of a licensed market; and

(b) the participant has complied with all of the participant’s obligations in relation to the transaction under the market integrity rules and the operating rules of the licensed market; and

(c) the transaction forms part of a series of transactions made to complete an order placed with a financial services licensee; and

(2) Subsection 1017F(5) of the Act is taken to be satisfied if, in respect of the transaction:

(a) the financial services licensee gives to the holder a single confirmation in respect of the series of transactions in which the transaction is included that:

(i) is in accordance with the authorisation; and

(ii) subject to subregulation (4), complies with the Act; and

(b) the confirmation is given:

(i) as soon as practicable; or

(ii) otherwise as permitted by the market integrity rules or the operating rules of that licensed market.

(3) For paragraph 1017F(9)(c) of the Act, subregulation (4) applies in relation to a transaction if:

(a) the responsible person is a participant of a licensed market; and

(b) the participant has complied with all of the participant’s obligations in relation to the transaction under the market integrity rules and the operating rules of the licensed market; and

(c) the transaction forms part of a series of transactions made to complete an order placed with a financial services licensee; and

(d) the holder of the product has given to the financial services licensee, in relation to that order or all orders (or all orders included in a class in which that order is included) placed with the financial services licensee by the holder, prior authorisation to give to the client a single confirmation in respect of the series of transactions that specifies the average price per unit of financial products acquired or disposed of in the series of transactions, instead of an individual confirmation in respect of each transaction in the series, that specifies the price per unit of the financial products acquired or disposed of in the transaction to which each confirmation relates.

(4) Subregulation 7.9.63B(7) is taken to be satisfied if, in respect of the transaction:

(a) the financial services licensee gives the confirmation to the holder in accordance with the authorisation; and

(b) unless otherwise provided by the market integrity rules or the operating rules of the licensed market, the financial services licensee, if requested to do so by the client, also gives to the holder a document that specifies the price per unit of the financial products sold or bought in each transaction in the series.

(5) For this regulation, an authorisation given by a person to a financial services licensee:

(a) must be given orally, or in writing, by the person; and

(b) is effective until it is revoked, either orally or in writing, by the person.

(6) If a person gives an oral authorisation to a financial services licensee, or revokes an authorisation orally, the financial services licensee must:

(a) make a written record of the authorisation or revocation; and

(b) send a copy of the written record to the person.

(7) In this regulation:

order means an instruction, or a series of instructions, to acquire or dispose of financial products.

7.9.63D Confirmation of transaction—information about cooling‑off period

(1) For paragraph 1017F(8)(d) of the Act, this regulation applies in relation to a transaction:

(a) that is the acquisition of a financial product to which:

(i) regulation 7.9.14, 7.9.66 or 7.9.68 applies; and

(ii) to which regulation 7.9.64 does not apply; or

(b) relating to an RSA to which subsection 1012I(2) of the Act applies, other than:

(i) an acquisition to which subsection 52(5) of the RSA Act applies; or

(ii) a transaction in which the product holder disposes of the holder’s interest in the product before the time that confirmation of the acquisition is required under section 1017F of the Act.

(2) The confirmation of the transaction must identify information about any cooling‑off regime that applies in respect of acquisitions of the product (whether the regime is provided for by a law or otherwise).

7.9.63E Confirmation of transaction—facility that provides written confirmation

For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies to all financial products and transactions as if subsection 1017F(5) of the Act were modified by omitting:

‘An arrangement under which the holder may request or require another person to provide a confirmation does not count as a facility that satisfies paragraph (b).’

and inserting:

‘An arrangement under which the holder may request or require another person (other than the responsible person or a person acting on behalf of the responsible person) to provide a confirmation does not count as a facility that satisfies paragraph (b).’.

7.9.63F Confirmation of transaction—acquisition of financial product

(1) For subparagraph 1017F(8)(c)(iii) of the Act, this regulation applies in relation to the confirmation of a transaction that is the acquisition of a financial product.

(2) The details of the transaction relating to the amount paid or payable by the holder in relation to the transaction need include only the amount the holder is required to pay to acquire the product.

7.9.63G Confirmation of transaction—disposal of financial product

(1) For paragraph 1017F(8)(d) of the Act, this regulation applies in relation to the confirmation of a transaction that is the disposal of a financial product.

(2) The confirmation must include the amount paid or payable to the holder as a result of the disposal.

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.

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;

(d) an interim contract of insurance within the meaning of subsection 11(2) of the Insurance Contracts Act 1984;

(e) a managed investment product if, at the time the product is issued, the managed investment scheme to which the product relates is not liquid (or if the scheme is not a registered scheme at that time, would not be liquid if the scheme was a registered scheme at that time);

(ea) a security in a CCIV if, at the time the security is issued, section 1230H of the Act (about when a sub‑fund is liquid) applies to the sub‑fund of the CCIV to which the security is referable;

(f) a superannuation product that is issued in relation to a superannuation entity that is not a public offer superannuation entity, other than;

(i) a superannuation product taken to be issued because of regulation 7.1.04E; or

(ii) an annuity or pension taken to be issued because of subregulation 7.9.02(4);

(fa) a superannuation product that is issued in relation to:

(i) a public offer superannuation entity mentioned in paragraph 7.6.01(1)(b), (c) or (d); or

(ii) a public offer superannuation entity that is a successor fund in relation to the transfer of benefits to that fund; or

(iii) a public offer superannuation entity that is an eligible rollover fund and in relation to which the superannuation product is issued pursuant to Part 24 of the SIS Act or Part 9 of the RSA Act;

(fb) a superannuation product that is a pension issued by a superannuation fund the rules of which do not allow a member to receive accumulated benefits in a form other than a pension from that fund;

(g) a risk insurance product that is:

(i) of less than 12 months duration; and

(ii) a renewal of an existing product on the terms and conditions to which the product is currently subject;

(h) a managed investment product in relation to which subsection 1016D(1) of the Act applies;

(ha) a foreign passport fund product in relation to which subsection 1016D(1) of the Act applies;

(hb) a security in a CCIV 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:

(a) the 14‑day period mentioned in subsection 1019B(3) of the Act; and

(b) the start of the event.

Example: Short‑term travel insurance.

(1A) For subsection 1019B(5A) of the Act, if:

(a) a person acquires an interest in a managed investment scheme; and

(b) the interest is a managed investment product or a foreign passport fund product; and

(c) the person acquires one or more other interests in that managed investment scheme in the course of the same transaction;

the person cannot exercise a right to return the product otherwise than by returning all of those interests.

Note: For the purposes of the Act and these Regulations, managed investment schemes include notified foreign passport funds: see section 1213E of the Act.

(2) In this regulation:

event means the commencement of the process in relation to which the risk insurance product was entered into.

Examples:

1 For insurance on household goods during removal, the commencement of loading a transportation vehicle is the event.

2 For travel insurance, the commencement of the journey is the event.

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 that, if the money to be repaid includes:

(a) restricted non‑preserved benefits within the meaning of the SIS Regulations; or

(b) preserved benefits within the meaning of the SIS Regulations;

the holder of the product must nominate a superannuation entity or RSA into which the money representing restricted non‑preserved benefits or preserved benefits is to be repaid.

(3) The right of return is taken to have been exercised only on receipt by the responsible person of the nomination.

(4) The holder must make the nomination not later than 1 month after notifying the responsible person of the right to exercise the right of return.

(5) The holder must notify the responsible person in writing or by electronic means.

(6) For subsection 1019B(7) of the Act, if:

(a) a holder nominates a superannuation entity or RSA; and

(b) the superannuation entity or RSA does not accept the nomination;

the responsible person may rollover or transfer the holder’s benefits to an eligible rollover fund.

(7) For subsection 1019B(7) of the Act, if the right of return is exercised, the responsible person must return the money as directed.

7.9.67 Variation of amount to be repaid

(1) For subsection 1019B(8) of the Act, the amount to be repaid on an exercise of the right to return a financial product is to be varied in accordance with this regulation.

Investment‑linked product

(2) If:

(a) the financial product is:

(i) an investment‑linked product within the meaning of the Insurance Contracts Act 1984; or

(ii) a managed investment product; or

(iia) a foreign passport fund product; or

(iib) a security in a CCIV; or

(iii) a superannuation product (subject to the governing rules of the issuer of the superannuation product relevant to the redemption of superannuation interests); and

(b) on the day on which the responsible person receives notification from the product holder exercising the holder’s right to return, the amount that would have been the price at which the product was acquired (the allocation price) if the product had been acquired on that day is less than the allocation price on the day on which the product was acquired;

the amount that would otherwise be repaid may be reduced by the adjustment amount.

(3) If:

(a) the financial product is:

(i) an investment‑linked product within the meaning given by the Insurance Contracts Act 1984; or

(ii) a managed investment product; or

(iia) a foreign passport fund product; or

(iib) a security in a CCIV; or

(iii) a superannuation product; and

(b) on the day on which the responsible person receives notification from the product holder exercising the holder’s right to return, the amount that would have been the price at which the product was acquired (the allocation price) if the product had been acquired on that day is greater than the allocation price on the day on which the product was acquired;

the amount that would otherwise be repaid is increased by the adjustment amount.

(4) For subregulations (2) and (3), the adjustment amount is the difference between:

(a) the price at which the product was acquired; and

(b) the price at which the product could be acquired on the day on which the responsible person receives notification from the product holder exercising the holder’s right to return.

(5) If the price referred to in paragraph (4)(b) is not determined under the relevant contract or legal relationship on the day on which the responsible person receives notification from the product holder exercising the holder’s right to return, the amount to be repaid and the adjustment amount is to be determined:

(a) on the basis of the most recent day on which a price was calculated under the contract or legal relationship; or

(b) if there is no day of that kind, as soon as practicable after the product issuer receives the notification.

Tax

(6) If:

(a) tax or duty of any kind has been paid, or is payable, by the responsible person because of the issue of the financial product; and

(b) either:

(i) if the tax or duty has been paid, the responsible person is unable to obtain a refund of the tax or duty; or

(ii) if the tax or duty has not been paid, the tax or duty does not cease to be payable as a result of the exercise of the right to return the financial product;

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) may be reduced to account for reasonable administrative and transaction costs (other than the payment of commissions or similar benefits) incurred by the responsible person that:

(a) are reasonably related to the acquisition of the financial product and the subsequent termination of the contract or legal relationship; and

(b) do not exceed the true cost of an arms’ length transaction.

Financial product issued for specific period

(8) If:

(a) the financial product is:

(i) a risk insurance product; or

(ii) that part of a financial product that is a risk insurance product; and

(b) either:

(i) the financial product has been issued for a specific period; or

(ii) the premium for the financial product has been paid in relation to cover for a specific period; and

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.

(3) For subsection 1019B(2) of the Act, it is a requirement of the exercise of the right to return a superannuation product mentioned in subregulation (1) that, if the monies to be repaid include employer contributions (whether or not they are mandated employer contributions), the standard employer‑sponsor must nominate a superannuation fund, approved deposit fund or RSA into which the employer contributions are to be repaid.

(4) The right of return is taken to have been exercised only on receipt by the responsible person of the nomination.

(5) The standard employer‑sponsor must make the nomination not later than 1 month after notifying the responsible person of the right to exercise the right of return.

(6) The standard employer‑sponsor must notify the responsible person in writing or by electronic means.

(7) For subsection 1019B(7) of the Act, if the right of return is exercised by a standard employer‑sponsor under this regulation, the responsible person must return the money as directed.

(8) For subsection 1019B(7) of the Act, if the right of return is exercised by a standard employer‑sponsor under this regulation, and if the monies to be repaid include monies paid in relation to the superannuation product by the standard employer‑sponsored member (including monies rolled over or transferred from another superannuation entity or RSA) (the relevant monies) the relevant monies are to be paid by the responsible person:

(a) in respect of benefits defined under the SIS Regulations as a restricted non‑preserved benefits or preserved benefits (restricted monies)—to a superannuation entity or RSA as directed by the standard employer‑sponsored member; or

(b) in respect of any other relevant monies paid by the standard employer‑sponsored member—as directed by the standard employer‑sponsored member.

(9) For subsection 1019B(7) of the Act, if:

(a) a financial product mentioned in this regulation is subject to the nomination of a further superannuation entity or RSA; and

(b) the application in relation to the issue of a financial product is not accepted by the nominated superannuation entity or RSA;

the responsible person may rollover or transfer the holder’s benefits to an eligible rollover fund.

7.9.69 Modification of provisions of Division 5 of Part 7.9 of the Act: terms of contract

(1) For paragraph 1020G(2)(a) of the Act, this regulation applies in relation to the following financial products:

(a) an investment‑linked product within the meaning of the Insurance Contracts Act 1984;

(b) a managed investment product;

(ba) a foreign passport fund product;

(d) a security in a CCIV.

(2) Division 5 of Part 7.9 of the Act is modified to the extent necessary to provide that a contract or legal relationship governing the issue and redemption of the financial product is taken to include a provision that:

(a) a product holder may have the right to return a financial product under the Act; and

(b) the product issuer does not contravene any terms of the contract or legal relationship by complying with a request to return a financial product made in accordance with the Act; and

(c) the amount to be repaid following the exercise of the right to return a financial product is the amount calculated in accordance with the Act.

(3) Division 5 of Part 7.9 of the Act, and the regulations made for, or relating to, provisions of that Division, are also modified to the extent necessary to give effect to the modification set out in subregulation (2).

7.9.70 Modification of provisions of Division 5 of Part 7.9 of the Act: distributions

(1) For paragraph 1020G(2)(a) of the Act, this regulation applies in relation to the holder of:

(a) an investment‑linked product within the meaning of the Insurance Contracts Act 1984; or

(b) a managed investment product; or

(ba) a foreign passport fund product; or

(d) a security in a CCIV.

(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.

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

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; and

(b) the issuer has provided information in accordance with Subdivisions 5.2 and 5.3; and

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;

(2) An application form for a financial product, for use by an employer that is applying as a prospective standard employer‑sponsor, that is attached to, accompanying or derived from a Product Disclosure Statement must require the employer’s name and address.

7.9.74A Periodic statements—requirement to state information as amounts in dollars

(1) For paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if subsection 1017D(5A) were modified to read as follows:

‘(5A) Unless in accordance with the regulations and a determination by ASIC:

(a) information to be disclosed in accordance with paragraphs (5)(a), (b), (c), (d) and (e) must be stated as amounts in dollars; and

(b) any other information in relation to amounts paid by the holder of the financial product during the period must be stated as amounts in dollars.’.

(2) For paragraph 1020G(1)(a) of the Act, the issuer of a financial product does not have to provide the information mentioned in subsection 1017D(5A) of the Act in the form required by that subsection, in a periodic statement prepared before 1 January 2005.

(3) For subsection 1017D(5A) of the Act, as modified in accordance with subregulation (1), if ASIC determines that, for a compelling reason based on the nature of a financial product or service, or the nature of the information, to state information to be disclosed in accordance with paragraphs 1017D(5)(a), (b), (c), (d) and (e) of the Act as an amount in dollars:

(a) would impose an unreasonable burden on a product issuer, or a class of product issuers; or

(b) would impose an unreasonable burden on a product issuer, or a class of product issuers, within a period specified in the determination; or

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

(b) would impose an unreasonable burden on a product issuer, or a class of product issuers, within a period specified in the determination; or

the information may be set out as a description of the method of calculating the charge or benefit (including worked dollar examples, unless that is inappropriate).

(5) A determination under subregulation (3) or (4) must be:

(a) in writing; and

(b) published in the Gazette.

7.9.75 Content of periodic statements: costs of transactions

(1) For paragraph 1017D(5)(g) of the Act, the prescribed details in relation to a financial product include:

(a) the amounts paid by the holder of the financial product in respect of the financial product during the period; and

(b) if the amounts paid in respect of the financial product, and the amounts paid in respect of other financial products, are paid into a common fund, and amounts are deducted from the common fund by way of expenses, fees and charges:

(i) a proportion of the amount deducted that is actually or notionally attributable to the product holder’s interest; and

(ii) if applicable—a statement informing the product holder that the notional proportion of the amount may not give an accurate estimate of the effect of the deduction on the product holder’s interest; and

(i) that there is a dispute resolution mechanism that covers complaints by holders of the product; and

(ii) of the means by which a product holder is able to gain access to that mechanism; and

(d) a statement that further information in relation to the financial product is available on request, and the means by which the product holder can gain access to that information; and

(e) in relation to a superannuation product (other than a self managed superannuation fund), a managed investment product or a foreign passport fund product—the details set out in Part 3 of Schedule 10.

(1A) However, for a periodic statement mentioned in an item of the table that is issued for the financial product mentioned in the item, and issued at a time described in the item, the prescribed details set out in paragraph (1)(b) are not required to be included if the statement includes, or is accompanied by, statements to the effect that:

(a) amounts for fees, expenses or charges have been deducted from a common fund to which the product relates in relation to the reporting period; and

(b) those deductions are borne indirectly by the holders of the product, and may affect the return to the holders; and

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

(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

(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.

(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;

(d) making the information available to the person’s agent in any way agreed to by the agent;

(e) making the information publicly available on the superannuation entity’s website.

(4) If a provision of the Act or these Regulations imposes additional requirements in relation to a matter in subregulation (1), (2) or (3), the ways of notifying a holder, giving a periodic statement and providing information are subject to the requirements.

Note: Regulation 7.9.75B is an example of an additional requirement.

(5) For this regulation, a notification, a periodic statement or information may be given or sent to a person’s agent only if the agent is not acting as the person’s agent in one of the capacities mentioned in subsection 1015C(3) of the Act.

7.9.75B Information in electronic form

(1) For:

(a) paragraph 1017B(3)(b) of the Act; and

(b) paragraph 1017D(6)(b) of the Act; and

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.

7.9.75C 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

(b) published in the Gazette.

7.9.75D Periodic statements—disclosure of amounts

(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

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).

(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

the periodic statement must include the information in subregulation (4).

(4) If subregulation (3) applies, the periodic statement must include:

(a) a statement informing the product holder that the amount is applicable; and

(b) details of the means by which a product holder is able to gain access to information relating to the amount.

(5) A determination under subregulation (2) or (3) must be:

(a) in writing; and

(b) published in the Gazette.

7.9.76 Consents to certain statements

(1) For subsection 1013K(2) of the Act, the period for which a person must keep a consent or a copy of a consent is 7 years from the date of the consent.

(2) The copy of the consent may be kept:

(a) in its physical form; or

(b) in an electronic form that is capable of being reproduced in physical form.

7.9.77 Alternative dispute resolution requirements—product issuer that is not a financial services licensee

(1) For subparagraph 1017G(2)(a)(i) of the Act, ASIC must take the following matters into account when considering whether to make or approve standards or requirements relating to internal dispute resolution:

(a) Australian/New Zealand Standard AS/NZS 10002:2014 Guidelines for complaint management in organizations published jointly by, or on behalf of, Standards Australia and Standards New Zealand, as in force or existing on 29 October 2014;

(b) any other matter ASIC considers relevant.

(2) ASIC may:

(a) vary or revoke a standard or requirement that it has made in relation to an internal dispute resolution procedure; and

(b) vary or revoke the operation of a standard or requirement that it has approved in its application to an internal dispute resolution procedure.

7.9.77A Dispute resolution requirement—obligation to cooperate with AFCA

For the purposes of paragraph 1020G(1)(c) of the Act, Part 7.9 of the Act applies as if subsection 1017G(1) of the Act were modified by inserting the following paragraph after paragraph 1017G(1)(d):

; and (e) take reasonable steps to cooperate with AFCA in resolving any complaint (other than a superannuation complaint) under the AFCA scheme to which the issuer or regulated person is a party, including by:

(i) giving reasonable assistance to AFCA in resolving the complaint; and

(ii) identifying, locating and providing to AFCA any documents and information that AFCA reasonably requires for the purposes of resolving the complaint; and

(iii) giving effect to any determination made by AFCA in relation to the complaint.

7.9.78 Additional statement: trustee required to provide benefits

(1) For paragraph 1017D(5)(g) of the Act, the prescribed details in relation to a superannuation product for which there is in force a notice under subregulation 6.17A(4) of the SIS Regulations, are:

(a) the person, persons or class, or classes, of persons mentioned in the notice; and

(b) the fact that, in accordance with the notice, the trustee will pay a benefit in respect of the member, on or after the death of the member, to the person, persons or class, or classes, of persons mentioned in the notice if:

(i) the person, or each person, mentioned in the notice is the legal personal representative or a dependant of the member; and

(ii) the proportion of the benefit that will be paid to that person, or to each of those persons, is certain or readily ascertainable from the notice or a statement under regulation 6.17B of the SIS Regulations; and

(iii) the notice is in effect; and

(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; or

(b) a financial product that would, apart from the effect of paragraph 761D(3)(c) of the Act, be a derivative and is excluded from that paragraph only because it is a security described in paragraph 92(5)(c) 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.

Division 9—Additional requirements for transfer of lost members and lost RSA holders

7.9.81 Lost members

(1) For paragraph 1020G(1)(c) of the Act, this regulation applies in relation to a restricted issue of a relevant financial product if:

(a) the issue is mentioned in paragraph 1016A(2)(c) of the Act; and

(b) the recipient is a lost member.

(2) Part 7.9 of the Act applies in relation to the restricted issue as if paragraph 1016A(2)(c) of the Act included an obligation on the trustee of the fund that is applying for the issue on behalf of the recipient to give to the trustee that is to issue the financial product:

(a) a statement that the recipient is a lost member; and

(b) if the recipient has specifically asked the trustee making the application not to disclose information of a specified kind—a statement to that effect; and

(c) all information in the possession of the trustee making the application that could reasonably help the other trustee to locate or identify the recipient, other than information of a kind that the recipient has specifically asked the trustee not to disclose.

7.9.82 Lost RSA holders

(1) For paragraph 1020G(1)(c) of the Act, this regulation applies in relation to a restricted issue of a relevant financial product if:

(a) the issue is mentioned in paragraph 1016A(2)(d) of the Act; and

(b) the recipient is a lost RSA holder.

(2) Part 7.9 of the Act applies in relation to the restricted issue as if paragraph 1016A(2)(d) of the Act included an obligation on the RSA provider that is applying for the issue on behalf of the recipient to give to the trustee that is to issue the financial product:

(a) a statement that the recipient is a lost RSA holder; and

(b) if the recipient has specifically asked the RSA holder not to disclose information of a specified kind—a statement to that effect; and

(c) all information in the possession of the RSA holder that could reasonably help the trustee to locate or identify the recipient, other than information of a kind that the recipient has specifically asked the RSA holder not to disclose.

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 or VIIIC of the Family Law Act 1975.

flag lifting agreement means a flag lifting agreement within the meaning of Part VIIIB or VIIIC 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 within the meaning of Part VIIIB or VIIIC of the Family Law Act 1975 in relation to the interest.

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 within the meaning of Part VIIIB or VIIIC of the Family Law Act 1975 in relation to the interest.

payment split means a payment split within the meaning of Part VIIIB or VIIIC of the Family Law Act 1975.

payment split notice means a notice given by a product issuer under:

(a) regulation 7A.03 of the SIS Regulations; or

(b) regulation 4A.03 of the RSA Regulations.

percentage‑only interest means percentage‑only interest within the meaning of Part VIIIB or VIIIC 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 within the meaning of Part VIIIB or VIIIC of the Family Law Act 1975.

superannuation agreement means a superannuation agreement within the meaning of Part VIIIB or VIIIC of the Family Law Act 1975.

superannuation interest means a superannuation interest within the meaning of Part VIIIB or VIIIC of the Family Law Act 1975.

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 as appropriate.

7.9.87 Modification of Act: Product Disclosure Statement in relation to superannuation interest under Family Law Act

(1) Subject to subregulation (4), for paragraph 1020G(1)(c) of the Act, paragraph 1012F(b) of the Act is modified in its application in relation to:

(a) a superannuation interest; and

(b) the non‑member spouse who acquires the superannuation interest;

in accordance with subregulation (2).

(2) Paragraph 1012F(b) is taken to require a regulated person to give the non‑member spouse a Product Disclosure Statement when the regulated person gives a payment split notice to the non‑member spouse.

(3) If paragraph 1012F(b), as modified in accordance with subregulation (2), applies in relation to a superannuation interest, regulation 7.9.04 does not apply in relation to the interest and the non‑member spouse.

(4) For paragraph 1020G(1)(a) of the Act, if the governing rules of a superannuation entity do not provide for a non‑member spouse to become a member of a superannuation fund in relation to the superannuation entity, section 1012B is modified by adding, after subsection 1012B(1):

‘(1A) This section does not apply in relation to:

(a) a superannuation interest; and

(b) the non‑member spouse who acquires the superannuation interest;

if the governing rules of a superannuation entity do not provide for a non‑member spouse to become a member of a superannuation fund in relation to the superannuation entity.’.

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;

(i) the percentage that is to apply to all splittable payments in respect of the interest; and

(ii) whether the governing rules of the fund would allow the non‑member spouse to become a member of the superannuation entity; and

(iii) information about the options available to the non‑member spouse in relation to the interest under Part 7A of the SIS Regulations;

(d) if the interest is a percentage‑only interest:

(i) the percentage specified in the relevant superannuation agreement, flag lifting agreement or splitting order; and

(ii) if the payment is under a superannuation agreement or flag lifting agreement, whether the percentage is to apply for the purposes of subparagraph 90XJ(1)(b)(i) or 90YN(1)(b)(i) (as the case may be) of the Family Law Act 1975; and

(iii) if the payment split is under a splitting order, whether the order is made under paragraph 90XT(1)(c) or 90YY(1)(c) (as the case may be) 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 issued under a payment split a statement providing the following information:

(a) the contact details for the product issuer;

(b) if the payment split is a base amount payment split:

(i) the base amount allocated to the non‑member spouse under the relevant superannuation agreement, flag lifting agreement or splitting order; and

(ii) the method by which the base amount will be adjusted on an ongoing basis;

(c) if the payment split is a percentage payment split, the percentage that is to apply to all splittable payments in respect of the interest;

(d) the circumstances in which the entitlement of the non‑member spouse will become payable;

(e) the options available under Part 4A of the RSA Regulations in relation to the non‑member spouse’s entitlement in respect of the interest;

(g) information about the dispute resolution system that covers complaints by holders of the product and about how that system may be accessed;

(h) details of any amounts payable by the non‑member spouse in respect of the payment split, and arrangements for the payment of any such amounts.

7.9.90 Information for existing holders of superannuation products and RSAs 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 that is issued in relation to a payment split; or’.

7.9.91 Periodic statements for retail clients for financial products that have an investment component—general

(1) For paragraph 1020G(1)(a) of the Act, this regulation applies in relation to a non‑member spouse who holds a superannuation or RSA by way of a payment split.

(2) The product issuer in relation to the superannuation product or RSA 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

(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 is subject to a base amount payment split; and

(b) the interest is in the growth phase; and

(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 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 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.

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.

Division 13—Unsolicited offers to purchase financial products off market

Subdivision A—Modifying provisions of Part 7.9 of the Act: offers to purchase securities in certain proprietary companies

7.9.95A Offers to which this Subdivision applies

For the purposes of paragraph 1020G(1)(c) of the Act, this Subdivision applies in relation to an offer for the purchase of securities of a proprietary company if:

(a) at the time the offer is made, the company:

(i) has one or more CSF shareholders; and

(ii) is an eligible CSF company; and

(b) Division 5A of Part 7.9 of the Act applies to the offer.

7.9.95B Duration and withdrawal of the offer

Part 7.9 of the Act applies in relation to the offer as if subsections 1019G(1) and (2) of the Act were modified by omitting “1 month” and inserting “14 days”.

7.9.95C Varying the terms of the offer

Part 7.9 of the Act applies in relation to the offer as if section 1019H of the Act were modified by replacing that section with the following:

1019H Varying terms of offer

(1) An offeror may vary the terms of an offer to which this Division applies for the purchase of securities in a proprietary company if:

(a) the variation is:

(i) to improve the consideration offered under the offer; or

(ii) to extend the period that the offer remains open at any time before the end of that period; and

(b) the variation will apply to each offeree that has not accepted the offer before the variation is made.

(2) The variation may only be made by sending a supplementary offer document in printed or electronic form to:

(a) if the variation is to improve the consideration offered under the offer—each offeree in accordance with paragraphs 1019E(1)(a) and (b); or

(b) if the variation is to extend the period that the offer remains open—each offeree that has not accepted the offer in accordance with paragraphs 1019E(1)(a) and (b).

(3) The supplementary offer document must:

(a) identify the offer to which it relates; and

(b) describe the variation; and

(4) The terms of the offer cannot be varied otherwise than under this section.

(5) This section does not:

(a) affect the offeror’s obligation under section 1019J to update the market value of the financial product to which the offer relates; or

(b) prevent the offeror from withdrawing the offer in accordance with section 1019G or paragraph 1019J(2)(a) and making another offer on different terms; or

7.9.95D Rights if requirements not complied with

Part 7.9 of the Act applies in relation to the offer as if subsection 1019K(1) of the Act were modified by inserting after paragraph 1019K(1)(b) of the Act:

(ba) in a situation where section 1019H applies:

(i) subsection 1019H(2) was not complied with; or

(ii) the supplementary offer document did not comply with subsection 1019H(3); or

(iii) there was a misleading or deceptive statement in the supplementary offer document;

Subdivision B—Other matters

7.9.96 Percentage increase or decrease in the market value of a product

For paragraph 1019J(1)(c) of the Act, 50% is specified.

7.9.97 Off‑market trading by professional investors etc

(1) For subparagraph 1019D(1)(d)(viii) of the Act, the following circumstances are specified:

(a) the offer mentioned in subsection 1019D(1) of the Act is to:

(i) a professional investor; or

(ii) a person who has net assets of at least the amount specified in regulations made for the purposes of subparagraph 761G(7)(c)(i) of the Act; or

(iii) a person who has gross income for each of the last 2 financial years of at least the amount specified in regulations made for the purposes of subparagraph 761G(7)(c)(ii) of the Act; or

(iv) a business that is not a small business within the meaning of subsection 761G(12) of the Act;

(b) the minimum amount payable for securities on acceptance of the offer by the person to whom the offer is made is at least $500 000;

(c) for a financial product other than securities, the offer for the financial product is for an amount that equals or exceeds the amount specified in regulations made for the purposes of paragraph 761G(7)(a) of the Act.

(2) For paragraph (b), in calculating the amount payable for securities, disregard any amount payable or paid to the extent to which it is to be paid, or was paid, out of money lent by the person offering the securities or an associate of the person offering the securities.

7.9.97A Information in offer document if payment is to be made in instalments

(1) For paragraph 1019I(2)(f) of the Act, the following information is specified for an offer document if payment for the financial products mentioned in the document is to be made in instalments:

(a) the amount of each instalment;

(b) when each instalment will be paid;

(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:

A formula to work out the total present value of a series of instalment payments

where:

n is the number of instalment payments to be made.

Rp is the amount of instalment payment number p, where each instalment payment is assigned a number from l to n.

tp is the number of whole months between the date of offer and the date that the instalment number p is due.

(3) For this regulation, the total current value of a financial product is the market value for the product on the date of offer as mentioned in paragraph 1019I(2)(b) 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.

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

(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.

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

(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

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;

(d) the seller’s short position as at the close of business 3 reporting days before the day the particulars must be given under subregulation (4).

(2) For subparagraph 1020AB(3)(b)(i) of the Act, in relation to particulars mentioned in paragraphs (1)(a), (b), and (c):

(a) the seller mentioned in subparagraph 1020AB(1)(a)(i) of the Act must give the particulars at the time of entering into an agreement to sell; and

(b) the seller mentioned in subparagraph 1020AB(1)(a)(ii) of the Act must give the particulars on or before 9 am:

(i) if the sale occurs after the start of the trading day but before 7 pm—on the next trading day after entering into an agreement to sell; and

(ii) if the sale occurs after 7 pm but before the start of the next trading day—on the second trading day after entering into an agreement to sell.

(3) A reference to trading day in subregulation (2) is to a trading day of the market where the sale is executed or reported.

(4) For subparagraph 1020AB(3)(b)(i) of the Act, in relation to particulars mentioned in paragraph (1)(d), the seller must give the particulars:

(a) on or before 9 am on the third reporting day after entering into the agreement to sell that causes the short position to occur; and

(b) on or before 9 am on each subsequent reporting day as long as the seller has a short position.

(5) Paragraph (4)(b) applies whether or not the particulars about the short position have changed from that given on the previous day.

(6) For subparagraph 1020AB(3)(b)(ii) of the Act, in relation to particulars mentioned in paragraph (1)(d), the seller must give the particulars in the form required by ASIC.

(7) For subparagraphs 1020AB(4)(a)(ii) and (b)(ii) of the Act, in relation to the particulars mentioned in paragraph (1)(d), the entity is ASIC.

(8) For subparagraph 1020AB(4)(b)(ii) of the Act, and in relation to the particulars other than the particulars mentioned in paragraph (1)(d), if the operator of the licensed market mentioned in subparagraph 1020AB(1)(a)(ii) of the Act (operator 1) appoints the operator of another licensed market (operator 2), in writing, as operator 1’s agent for the purpose of receiving any of those particulars, operator 2 is the entity for those particulars.

7.9.100A Seller disclosure of existing short position

(1) If a seller has a short position which arises from an agreement to sell, entered into before commencement of this regulation, the seller must give particulars about the short position as at the close of business on the day this regulation commences:

(a) on or before 9 am on the third reporting day after commencement of this regulation; and

(b) on or before 9 am on each subsequent reporting day as long as the seller has a short position.

(2) The particulars must be given to ASIC in the form required by ASIC.

7.9.101 Licensee disclosure

(1) For paragraph 1020AC(2)(a) of the Act, the particulars that a financial services licensee must give in relation to information given to the licensee under section 1020AB of the Act in relation to a sale of a listed section 1020B product is the information specified in paragraphs 7.9.100(1)(a), (b) and (c).

(2) For paragraph 1020AC(2)(b) of the Act:

(a) the time for disclosure of the information is on or before 9 am:

(i) if the information is given to the licensee after the start of the trading day but before 7 pm—on the next trading day after the licensee is given the information under section 1020AB of the Act; and

(ii) if the information is given to the licensee after 7 pm but before the start of the next trading day—on the second trading day after the licensee is given the information under section 1020AB of the Act; and

(b) the manner for disclosure of the information is by electronic transmission to the operator.

(3) A reference to trading day in subregulation (2) is to a trading day of the market where the information is given.

(4) For paragraph 1020AC(3)(b) of the Act, and in relation to the particulars mentioned in paragraph 1020AC(3)(a) of the Act, if the operator of the licensed market mentioned in paragraph 1020AC(1)(a) of the Act (operator 1) appoints the operator of another licensed market (operator 2), in writing, as operator 1’s agent for the purpose of receiving any of those, operator 2 is the entity for those particulars.

7.9.102 Public disclosure of information

(1) For paragraph 1020AD(2)(a) of the Act, the particulars which the operator of a licensed market must publicly disclose in relation to information given to the operator under section 1020AB or 1020AC of the Act in relation to a sale of a listed section 1020B product are the total number of each kind of section 1020B product that has been sold on a particular day and disclosed to the operator under section 1020AB or 1020AC of the Act.

(1A) For paragraph 1020AD(2)(a) of the Act, the particulars which ASIC must publicly disclose in relation to information given to it under section 1020AB of the Act in relation to a sale of a listed section 1020B product are the total of all short positions in a product issued by a listed entity that have been disclosed to ASIC under section 1020AB of the Act on the previous reporting day.

(2) For subparagraph 1020AD(2)(b)(i) of the Act, the time for the disclosure of the information mentioned in subregulation (1) is:

(a) if the information is given to the licensee after the start of the trading day but before 7 pm—on the next trading day after the day the agreements to sell were entered into; and

(b) if the information is given to the licensee after 7 pm but before the start of the next trading day—on the second trading day after the day the agreements to sell were entered into.

(3) A reference to trading day in subregulation (2) is to a trading day of the market in relation to which the operator is responsible for disclosure of the information.

(3A) For subparagraph 1020AD(2)(b)(i) of the Act, the time for the disclosure of the information mentioned in subregulation (1A) is the first reporting day after the day the information is received.

(4) For subparagraph 1020AD(2)(b)(ii) of the Act, the manner of public disclosure of the information mentioned in subregulation (1) is by publication:

(a) on the operator’s website; or

(b) in any other form that is easily accessible by the public.

(5) For subparagraph 1020AD(2)(b)(ii) of the Act, the manner of public disclosure of the information mentioned in subregulation (1A) is by publication:

(a) on ASIC’s website; or

(b) in any other form that is readily accessible by the public.

Part 7.10—Market misconduct and other prohibited conduct relating to financial products and financial services

7.10.01 Meaning of Division 3 financial products—excluded superannuation products

For the purposes of paragraph (e) of the definition of Division 3 financial products in subsection 1042A(1) of the Act, superannuation products provided by a superannuation entity that is not a public offer entity are prescribed.

Note: This means that these superannuation products are not Division 3 financial products.

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 CPA Australia Ltd Professional Standards (Accountants) Scheme, published in the New South Wales Government Gazette No. 98, 30 August 2019, including as modified by the extension published in the New South Wales Government Gazette No. 71, 1 March 2024 Note: This Scheme was formerly the CPA Australia Ltd Professional Standards (Accountants) Scheme, published in the New South Wales Government Gazette No. 138, 22 December 2017.	The Scheme—22 October 2019 The extension—the day the Treasury Laws Amendment (Professional Standards Schemes) Regulations 2024 commence
2	Chartered Accountants Australia and New Zealand Professional Standards Scheme, published in the New South Wales Government Gazette No. 72, 12 July 2019, including as modified by the extension published in the New South Wales Government Gazette No. 71, 1 March 2024 Note: This Scheme is a national Scheme which replaces 7 previous State and Territory Schemes of the same name.	The Scheme—22 October 2019 The extension—the day the Treasury Laws Amendment (Professional Standards Schemes) Regulations 2024 commence
3	The Law Society of New South Wales Professional Standards Scheme, published in the New South Wales Government Gazette No. 87, 7 September 2018, including as modified by the extension published in the New South Wales Government Gazette No. 311, 14 July 2023 Note: This Scheme was formerly the Law Society of New South Wales Scheme, published in the New South Wales Government Gazette No. 78, 27 July 2012, including as modified by the extension published in the New South Wales Government Gazette No. 72, 30 June 2017.	The Scheme—26 March 2019 The extension—the day the Treasury Laws Amendment (Professional Standards Schemes) Regulations 2023 commence
4	The New South Wales Bar Association Professional Standards Scheme, published in the New South Wales Government Gazette No. 179, 20 December 2019 Note: This scheme was formerly the New South Wales Bar Association Scheme, published in the New South Wales Government Gazette No. 17, 5 March 2015, including as modified by the amendments published in the New South Wales Government Gazette No. 123, 10 November 2017.	1 July 2020
6	The Law Institute of Victoria Limited Professional Standards Scheme, published in the Victoria Government Gazette No. G 11, 17 March 2022 Note: This Scheme was formerly the Law Institute of Victoria Limited Scheme, published in the Victoria Government Gazette No. G 16, 21 April 2016, including as modified by the extension published in the Victoria Government Gazette No. G 9, 4 March 2021.	1 July 2022
7	The Victorian Bar Professional Standards Scheme, published in the Victoria Government Gazette No. G 16, 18 April 2019, including as modified by the extension published in the Victorian Government Gazette No. G 45, 9 November 2023 Note: This Scheme was formerly the Victorian Bar Professional Standards Scheme, published in the Victoria Government Gazette No. S 134, 24 April 2014.	The Scheme—22 October 2019 The extension—the day the Treasury Laws Amendment (Professional Standards Schemes) Regulations 2024 commence
8	The Bar Association of Queensland Professional Standards Scheme, approved as described in the Professional Standards (Bar Association of Queensland Professional Standards Scheme) Notice 2019 (Qld), 18 February 2019 Note: This Scheme was formerly the Bar Association of Queensland Scheme, published in the Queensland Government Gazette No. 40, 24 June 2013, including as modified by the extension published in the Queensland Government Gazette No. 60, 23 March 2018.	26 March 2019
10	The Queensland Law Society Professional Standards Scheme, approved as described in the Professional Standards (The Queensland Law Society Professional Standards Scheme) Notice 2021 (Qld), 17 December 2021 Note: The Scheme was formerly the Queensland Law Society Professional Standards Scheme, approved as described in the Professional Standards (Queensland Law Society Professional Standards Scheme) Notice 2016 (Qld), 30 June 2016, including as modified by the extension published in the Queensland Government Gazette No. 63, 23 April 2021.	1 July 2022
12	The Law Society of Western Australia Professional Standards Scheme, published in the Western Australian Government Gazette No. 23, 8 March 2024 Note: This Scheme was formerly the Law Society of Western Australia Professional Standards Scheme, published in the Western Australian Government Gazette No. 62, 7 May 2019.	1 July 2024
13	The Western Australian Bar Association Professional Standards Scheme, published in the Western Australian Government Gazette No. 63, 24 April 2020 Note: This scheme was formerly the Western Australian Bar Association Scheme, published in the Western Australian Government Gazette No. 57, 17 April 2014, including as modified by the extension published in the Western Australian Government Gazette No. 196, 21 December 2018.	1 July 2020
15	The Law Society of South Australia Professional Standards Scheme, published in the South Australian Government Gazette No. 5, 20 January 2022 Note: This Scheme was formerly the Law Society of South Australia Professional Standards Scheme, published in the South Australian Government Gazette No. 21, 5 April 2017, including as modified by the amendments published in the South Australian Government Gazette No. 77, 21 November 2017.	1 July 2022
16	The South Australian Bar Association Professional Standards Scheme, published in the South Australian Government Gazette No. 15, 10 March 2022 Note: This Scheme was formerly the South Australian Bar Association Inc Professional Standards Scheme, published in the South Australian Government Gazette No. 35, 30 May 2017.	1 July 2022
19	The Institute of Public Accountants Professional Standards Scheme, published in the Victoria Government Gazette No. S 598, 27 October 2021 Note: This Scheme was formerly the Institute of Public Accountants Professional Standards Scheme, published in the Victoria Government Gazette No. G 42, 18 October 2018, including as modified by the extension published in the Victoria Government Gazette No. S 695, 24 December 2020.	22 March 2022
20	The Association of Consulting Surveyors National Professional Standards Scheme, published in the New South Wales Government Gazette No. 90, 1 May 2020	1 July 2020
21	The Australian Property Institute Valuers Limited Professional Standards Scheme, published in the New South Wales Government Gazette No. 214, 21 May 2021	1 September 2021

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.

Part 7.10B—Financial services compensation scheme of last resort

7.10B.50 Reporting by CSLR operator if sub‑sector levy cap could be exceeded (or further exceeded)

For the purposes of subsection 1069F(4) of the Act, the following information is prescribed for a notice about a revised claims, fees and costs estimate for a levy period and a sub‑sector that has come into force and could cause the sub‑sector levy cap for the levy period and sub‑sector to be exceeded (or further exceeded):

(a) the number of applications made under section 1066 of the Act that underpin the revised estimate;

(b) the total amount of compensation that (having regard to actuarial principles) will be payable under section 1063 of the Act for those applications;

(c) the portion of the sum of AFCA’s unpaid fees that (having regard to actuarial principles) will be attributable to the sub‑sector and that underpins the revised estimate.

7.10B.55 Reporting by CSLR operator after the end of each levy period

For the purposes of subsection 1069G(1) of the Act, the following matters are prescribed for a report for a levy period:

(a) the CSLR operator’s estimate of the costs for the financial services compensation scheme of last resort for the levy period, including the following:

(i) each claims, fees and costs estimate (within the meaning of the Financial Services Compensation Scheme of Last Resort Levy (Collection) Act 2023) for the levy period;

(ii) for the first levy period—the estimate under section 11 of that Act;

(iii) for each of the first 4 levy periods—any revised estimate under section 12 of that Act that is made before the time of preparing the report and that has not been included in an earlier report;

(b) the CSLR operator’s approach to determining each of these estimates;

(d) the number of payments of amounts of compensation under section 1063 of the Act during the levy period, and the total of those amounts;

(e) the number of applications made under section 1066 of the Act by persons during the levy period for which the persons are not eligible under section 1064 of the Act for compensation;

(f) the number of applications made under section 1066 of the Act by persons during the levy period for which, at the time of preparing the report, it is too early for the persons to be notified under section 1068 of the Act of:

(i) offers of compensation; or

(ii) ineligibility for compensation;

(g) the average time taken after the CSLR operator receives an application made under section 1066 of the Act by a person during the levy period for the CSLR operator to notify the person under section 1068 of the Act:

(i) of an offer of compensation; or

(ii) that the person is not eligible for compensation;

(h) an analysis of the applications made under section 1066 of the Act during the levy period that includes details of:

(i) the kinds of products or services covered by the relevant AFCA determinations to which the applications relate; and

(ii) the kinds of providers of those products or services; and

(iii) any patterns or trends;

(i) the number of notifications under subsection 1069F(3) of the Act (about a sub‑sector levy cap being exceeded (or further exceeded)) during the levy period;

(j) for each sub‑sector—the total amount of levy paid that was imposed by the Financial Services Compensation Scheme of Last Resort Levy Act 2023 across all persons for the levy period and the sub‑sector;

(k) the number of determinations made under section 1069H of the Act for the levy period that:

(i) under subsection 1069H(4) of the Act, specify that levy needs to be imposed by subsection 8(3) of the Financial Services Compensation Scheme of Last Resort Levy Act 2023 (about special levy for just the primary sub‑sector); or

(ii) under subsection 1069H(5) of the Act, specify that levy needs to be imposed by section 9 of that Act (about special levy to be spread across several sub‑sectors);

(l) for each determination referred to in paragraph (k):

(i) details of the determination; and

(ii) details about the levy paid as a result of the determination.

Note 1: Information about the matters in each of these paragraphs is required by subsection 1069G(1) of the Act to be included in each report.

Note 2: The estimates referred to in subparagraphs (a)(ii) and (iii) are of unpaid claims, and AFCA’s fees, for complaints given to AFCA before the accumulation recovery day.

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

(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, a Public Trustee of a State or Territory, or a company listed in Schedule 9 holds (whether alone or together with any other person or persons) the Division 3 securities in trust in the ordinary course of its business.

broker means an Australian financial services licensee who is a participant of a financial market.

broker’s agent means:

(a) the agent of a broker; or

(b) the employee of a broker.

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) the issuer in relation to the product; or

(b) any other person identified as an issuer, or treated as an issuer, under the ASTC operating rules.

market licensee, in relation to securities specified in a transfer document, means the market licensee that operates the market for the securities.

7.11.03 Arrangements about Division 4 financial products

(1) A financial product is a Division 4 financial product if the financial product is:

(a) a Division 3 security other than a security mentioned in paragraph 1073A(1)(e) of the Act; or

(b) declared by ASIC, under section 1075A of the Act, to be a financial product the transfer of which will be effected through ASTC under these Regulations.

(2) Subregulations (3) to (8) apply in relation to a class of Division 4 financial products that is admitted to quotation.

(3) A Division 4 financial product in the class of Division 4 financial products is not taken to have stopped being quoted merely because of a temporary suspension of quotation of the class.

(4) If:

(a) there is a suspension of the quotation of a Division 4 financial product in the class; and

(b) during the suspension, the issuer in relation to the Division 4 financial product ceases to be included in the official list of the market licensee on which the Division 4 financial product is traded;

the Division 4 financial product is taken to stop being quoted when the issuer ceases to be included in the official list.

(5) Subregulation (4) does not limit the circumstances in which a Division 4 financial product in the class may be taken to have stopped being quoted on a financial market of a market licensee.

(6) For the provisions mentioned in subregulation (8), if:

(a) a Division 4 financial product stops being quoted on a financial market of a market licensee; and

(b) the ASTC operating rules provide that the Division 4 financial product is to be taken to continue to be quoted for a specified period;

the Division 4 financial product is taken to be quoted during the period.

(7) For the provisions mentioned in subregulation (8), if:

(a) a Division 4 financial product has been issued; and

(b) the Division 4 financial product:

(i) is approved, by a market licensee, to be admitted to quotation on a financial market of the market licensee; and

(ii) has not yet been quoted; and

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

(d) regulations made for the purposes of Part 7.11 of the Act.

7.11.04 Arrangements for forms

(1) A reference in this Part to a form by number is a reference to:

(a) the form numbered in that way in Schedule 2A; or

(b) a form that has the same effect.

(2) If a form in Schedule 2A refers to the full name of the transferor of Division 3 securities, the reference includes a reference to the name of the person shown in the records of the issuer in relation to those securities as the holder of those securities.

7.11.05 Document duly completed in accordance with a particular form

(1) Subject to subregulation (2), a document is not duly completed in accordance with one of Forms 1, 2, 3, 4, 5, 6, 7 and 8, or a part of one of those forms, unless the following requirements are met:

(a) the document must purport to state the transferee’s name and address where the form or part requires that information;

(b) the document must bear a stamp that purports to be the transferor’s broker’s stamp where the form or part requires that information;

(c) the document must bear a stamp that purports to be the transferee’s broker’s stamp where the form or part requires that information;

(d) the document must bear a stamp that purports to be a market licensee’s stamp where the form or part requires that information.

(2) If a document (the first document) relates to particular Division 3 securities, the following paragraphs apply for the purposes of determining whether the first document and another document (the second document) are, together or with 1 or more other documents, a sufficient transfer of the Division 3 securities:

(a) the first document is not duly completed in accordance with Part 3 of Form 1, 2, 3, 5, 6 or 7 unless it:

(i) bears a stamp that purports to be the transferee’s broker’s stamp where that part refers to the transferee’s broker’s stamp; and

(ii) sets out a string of characters that purports to be the transfer consolidation number of the first document where that part refers to the transferee’s broker’s stamp;

(b) the second document is not duly completed in accordance with Part 1 of Form 4 or 8 unless it sets out a string of characters that purports to be the transfer consolidation number of the first document where that part refers to a transfer consolidation number or transfer consolidation numbers (whether or not it sets out 1 or more strings of characters that do not purport to be the transfer consolidation number);

(c) the second document can be duly completed in accordance with Part 1 of Form 4 or 8 even if it does not set out correctly the number of Division 3 securities to which it relates.

Note: If the document mentioned in subregulation (1), or the documents mentioned in subregulation (2), are a sufficient transfer of the Division 3 securities, the document or documents become transfer documents for this Part.

7.11.06 Stamping of documents

(1) In this Part (other than regulation 7.11.40):

(a) a reference to the stamping of a document is a reference to stamping in ink; and

(b) a reference to a stamp on a document, or to a stamp borne by a document, is a reference to a stamp stamped on the document in ink.

(2) A reference in regulation 7.11.40 to the stamping of a document is a reference to stamping the document in any manner.

Examples:

1 Stamping in ink.

2 Affixing a stamp.

3 Impressing a stamp.

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

(1) For subparagraph 1073C(a)(ii) of the Act, the Westpac Banking Corporation is prescribed.

(2) For subparagraph 1073C(b)(iii) of the Act, the Australian Gas Light Company is prescribed.

Note: The effect of section 1073C of the Act is that Division 3 of Part 7.11 of the Act applies to bodies prescribed for that section as if they were companies.

7.11.08 Interests in registered schemes

For paragraph 1073A(1)(c) of the Act, an interest in a registered scheme is an interest in a registered scheme if the interest:

(a) is an interest in a managed investment scheme that is registered under section 601EB of the Act; and

(b) is quoted on the financial market of the Australian Stock Exchange Limited.

Division 2—Application of Part 7.11

7.11.09 Application

This Part applies to conduct engaged in in this jurisdiction or otherwise.

Division 3—Transfer of Division 3 securities effected otherwise than through a prescribed CS facility

7.11.10 Application of Division 3

This Division is made under section 1073D of the Act, and applies to transfers of Division 3 securities effected otherwise than through a prescribed CS facility.

7.11.11 Sufficient transfer: general

(1) A document is a sufficient transfer of Division 3 assets if it:

(a) relates to those assets; and

(b) is duly completed in accordance with the documentation in any of the following subparagraphs:

(i) Parts 1 and 2 of Form 1;

(ii) Part 1 of Form 1 and Parts 1 and 2 of Form 2 or Form 3;

(iii) Parts 1 and 3 of Form 1 and both parts of Form 4;

(iv) Part 1 of Form 1, Parts 1 and 3 of Form 2 or Form 3 and both parts of Form 4.

(2) A document is a sufficient transfer of Division 3 rights if it:

(a) relates to those rights; and

(b) is duly completed in accordance with the documentation in any of the following subparagraphs:

(i) Parts 1 and 2 of Form 5;

(ii) Part 1 of Form 5 and Parts 1 and 2 of Form 6 or Form 7;

(iii) Parts 1 and 3 of Form 5 and both parts of Form 8;

(iv) Part 1 of Form 5, Parts 1 and 3 of Form 6 or Form 7 and both parts of Form 8.

7.11.12 Sufficient transfer of Division 3 assets: licensed trustee company or Public Trustee of a State or Territory

(1) This regulation applies to the transfer of Division 3 assets, otherwise than by way of sale, gift or exchange, by:

(a) a licensed trustee company; or

(b) a Public Trustee of a State or Territory; or

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; or

(b) a Public Trustee of a State or Territory; or

whether alone or together with any other person or persons, in favour of the beneficial owner of those rights.

(2) A document is a sufficient transfer of the Division 3 rights if it:

(a) relates to those rights; and

(b) is completed in accordance with Form 10.

7.11.14 Sufficient transfer

(1) A document that is a sufficient transfer of Division 3 assets may be used:

(a) as a proper instrument of transfer for section 1071B of the Act; and

(b) as an instrument of transfer for the purposes of any other law or instrument governing or relating to those assets.

(2) A document that is a sufficient transfer of Division 3 rights may be used as an instrument of transfer of those rights for the purposes of any law or instrument governing or relating to those rights.

7.11.15 Transferee’s execution of transfer of Division 3 assets

(1) If Division 3 assets are transferred by means of a sufficient transfer:

(a) the transferee is taken to have agreed at the execution time to accept the Division 3 assets subject to the terms and conditions on which the transferor held them at that time; and

(b) the terms and conditions are the terms and conditions applicable as between:

(i) the issuer in relation to the Division 3 assets; and

(ii) the holder for the time being of the Division 3 assets.

(2) If the Division 3 assets are shares, the transferee is also taken to have agreed, at the execution time:

(a) to become a member of the issuer; and

(b) to be bound, on being registered as the holder of the shares, by the issuer’s constitution.

7.11.16 Transferee’s execution of transfer of Division 3 rights

(1) If Division 3 rights relating to Division 3 assets are transferred by means of a sufficient transfer, the transferee is taken:

(a) to have applied at the execution time to the issuer in relation to the Division 3 assets for the issue to the transferee of the Division 3 assets; and

(b) to have agreed at the execution time to accept the Division 3 assets subject to the terms and conditions on which the issuer offers them for subscription.

(2) If the Division 3 assets are shares, the transferee is also taken to have agreed, at the execution time:

(a) to become a member of the issuer; and

(b) to be bound, on being registered as the holder of the shares, by the issuer’s constitution.

7.11.17 Transfer document that purports to bear stamp of transferor's broker

(1) This regulation applies if a transfer document relating to Division 3 assets or Division 3 rights:

(a) is a duly completed Part 1; and

(b) bears a stamp that purports to be a stamp of the transferor’s broker (the designated broker).

(2) Each associate (if any) of the designated broker is taken to have warranted:

(a) that the statements in the transfer document that purport to be certified by the designated broker are accurate; and

(b) that the transferor is:

(i) the registered holder of, or entitled to be registered as the holder of, the Division 3 assets; or

(ii) is entitled to the Division 3 rights;

and is legally entitled or authorised to sell or dispose of the Division 3 assets or Division 3 rights.

(3) If the designated broker is not a broker’s agent, the designated broker is taken to have warranted:

(a) that the statements in the transfer document that purport to be certified by the designated broker are accurate; and

(b) that the transferor is:

(i) the registered holder of, or entitled to be registered as the holder of, the Division 3 assets; or

(ii) is entitled to the Division 3 rights;

and is legally entitled or authorised to sell or dispose of the Division 3 assets or Division 3 rights.

(4) The following additional arrangements apply if the transfer document has been duly completed in accordance with Part 1 of Form 1 or Form 5:

(a) if, when the transfer document was stamped with the stamp mentioned in paragraph (1)(b), the designated broker had authority to sell the Division 3 assets or Division 3 rights, on the transferor’s behalf, to:

(i) the transferee; or

(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;

(i) the issuer in relation to the Division 3 assets or Division 3 rights; and

(ii) the transferor; and

(iii) the transferee; and

(iv) the transferee’s broker;

against any loss or damage arising if:

(v) the stamp mentioned in paragraph (1)(b) is not the designated broker’s stamp; or

(vi) apart from paragraph (a), the designated broker was not authorised to execute the transfer document on the transferor’s behalf.

7.11.18 Warranties by market licensee if transfer document purports to bear its stamp

(1) This regulation applies if a transfer document:

(a) has been duly completed in accordance with Part 1 of Form 3 or Form 7; and

(b) bears a stamp that purports to be a stamp of a market licensee.

(2) The market licensee is taken to have warranted that:

(a) the statements in the transfer document that purport to be certified by a market licensee are accurate; and

(b) the transferor is:

(i) the registered holder of, or entitled to be registered as the holder of, the Division 3 assets; or

(ii) entitled to the Division 3 rights;

and is legally entitled or authorised to sell or dispose of the Division 3 assets or Division 3 rights.

7.11.19 Indemnities by market licensee and broker if transfer document purports to bear their stamps

(1) This regulation applies if:

(a) a transfer document (the first document) relating to Division 3 assets or Division 3 rights:

(i) has been duly completed in accordance with Part 1 of Form 1 or Form 5; and

(ii) bears a stamp that purports to be the stamp of the transferor’s broker; and

(b) another transfer document:

(i) relates to any or all of the Division 3 assets or Division 3 rights; and

(ii) has been duly completed in accordance with Part 1 of Form 3 or Form 7; and

(iii) bears a stamp that purports to be the stamp of a market licensee.

(2) The market licensee is liable to indemnify:

(a) the issuer in relation to the Division 3 assets or Division 3 rights; and

(b) the transferor in relation to the other document; and

(d) the broker of the transferee in relation to the other document;

against any loss or damage arising if:

(e) the stamp mentioned in subparagraph (1)(a)(ii) is not the stamp of the transferor’s broker; or

(f) apart from paragraph 7.11.17(4)(a), the designated broker was not authorised to execute the first document on behalf of the transferor in relation to the first document.

(3) Each associate (if any) of the transferor’s broker is liable to indemnify the market licensee against any loss or damage arising as mentioned in subregulation (2).

(4) If the transferor’s broker is not a broker’s agent, the transferor’s broker is liable to indemnify the market licensee against any loss or damage arising as mentioned in subregulation (2).

(5) Nothing in this regulation limits the operation of anything in regulation 7.11.17 or 7.11.18 or of anything else in this regulation.

7.11.20 Joint and several warranties and liabilities

(1) If 2 or more persons are taken to have warranted in the terms mentioned in paragraphs 7.11.17(2)(a) and (b) or 7.11.17(3)(a) and (b), the persons are taken to have warranted jointly and severally.

(2) If 2 or more persons are liable as mentioned in paragraph 7.11.17(4)(b) or (c), or subregulation 7.11.19(3) or (4), the persons are liable jointly and severally.

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, a Public Trustee of a State or Territory, or a company listed in Schedule 9 named in the instrument held (whether alone or together with any other person or persons) in the ordinary course of its business, in trust for or on behalf of the transferee, the Division 3 assets or Division 3 rights to which the sufficient transfer relates; and

(b) the transfer was not made by way of a sale, gift or exchange of the Division 3 assets or Division 3 rights.

7.11.22 Details to be included in instrument of transfer

(1) For subsection 1071B(3) of the Act, for a transfer of unquoted securities, the State or Territory in this jurisdiction in which the company is taken to be registered is a prescribed detail.

(2) In this regulation:

unquoted securities means securities (within the meaning of subsection 1071A(1) of the Act) that are not admitted to quotation on any of the financial markets operated by the Australian Stock Exchange Limited, Bendigo Stock Exchange Limited or National Stock Exchange of Australia Limited.

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: see regulation 1.0.02AB.

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

(2) The authority continues, despite the person’s death, as if the person were still alive.

(3) If the participant enters into the transaction while the authority so continues, the transaction is binding on the person’s legal representative.

(4) The authority can be revoked by the person’s legal representative in any way that the person could have revoked it while the person was alive.

7.11.26 Authority to enter into transaction gives authority to transfer

(1) This regulation applies if a person authorises a participant to enter into a transaction involving the disposal of a Division 4 financial product (for example, a sale).

(2) The person is taken to have authorised the participant to effect any proper ASTC transfer of the Division 4 financial product that the participant effects, whether or not the transfer has any connection with the transaction.

Note: The transfer may have no connection with the transaction because of the operation of the provisions of the ASTC operating rules mentioned in subregulation 7.5.41(1).

(3) The authority that the person is taken by subregulation (2) to have given:

(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 (the transacting participant) in a financial market; and

(b) under the market licensee’s operating rules, a participant in a clearing and settlement facility (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:

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);

7.11.28 Effect of proper ASTC transfer on transferee: rights

(1) If a proper ASTC transfer of a Division 4 financial product that is rights (other than rights that relate to an interest in a managed investment scheme) takes effect at a particular time, the transferee is taken:

(a) to have applied at that time to the issuer in relation to the rights for the issue to the transferee of the Division 4 financial product to which the rights relate; and

(b) to have agreed at that time to accept the Division 4 financial product to which the rights relate subject to the terms and conditions on which the issuer offers them for subscription.

(2) If the Division 4 financial product to which the rights (other than rights that relate to an interest in a managed investment scheme) relate is shares, the transferee is also taken to have agreed, at that time:

(a) to become a member of the issuer; and

(b) to be bound, on being registered as the holder of the shares, by the issuer’s constitution.

(3) If the Division 4 financial product is a right to an interest in a managed investment scheme, the transferee is also taken to have agreed at that time:

(a) to have applied at that time to the responsible entity in relation to the rights for the issue to the transferee of the interest in a managed investment scheme to which the rights relate; and

(b) to have agreed at that time to accept the interest in a managed investment scheme to which the rights relate subject to the terms and conditions on which they are offered by the responsible entity; and

(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:

(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);

7.11.29 Warranties by participant if identification code is included in transfer document

(1) This regulation applies if the transfer document for a proper ASTC transfer of a Division 4 financial product includes a participant’s identification code as the identification code of the participant effecting the transfer.

(2) If the participant is the transferor, the participant is taken to have warranted that:

(a) the transfer was effected by the participant; and

(b) the transferor was legally entitled or authorised to transfer the Division 4 financial product.

(3) Subregulation (4) applies if:

(a) the participant is not the transferor; and

(b) the transfer is pursuant to a transaction in relation to which, or to transactions in relation to each of which, one of the following conditions is satisfied:

(i) the transaction was entered into in the ordinary course of trading on a financial market;

(ii) the transaction is, under the operating rules of a market licensee, described, or to be described, as ‘special’ when it is reported to the market licensee.

(4) The participant is taken to have warranted that:

(a) the transferor was legally entitled or authorised to transfer the Division 4 financial product; and

(b) the transfer was effected by the participant; and

(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

(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;

(d) if a participant acted as the transferee’s agent in the transfer—that participant;

(e) the prescribed CS facility operated by ASTC;

(f) if TNS Clearing Pty Limited is the counter‑party in the transaction—TNS Clearing Pty Limited;

(g) if Options Clearing House Pty Limited is the counter‑party in the transaction—Options Clearing House Pty Limited.

(3) For this regulation, the effect of regulation 7.11.26 is to be disregarded in determining whether a person:

(a) was legally entitled or authorised to transfer Division 4 financial products; or

(b) was authorised by another person to effect a transfer of Division 4 financial products.

7.11.31 Indemnities in respect of warranted matters: transferor not legally entitled or authorised to transfer Division 4 financial products

(1) This regulation applies if:

(a) a participant is taken by regulation 7.11.29 to have warranted, in relation to a proper ASTC transfer of a Division 4 financial product, that the transferor was legally entitled or authorised to transfer the Division 4 financial product; and

(b) the transferor was not legally entitled or authorised to transfer the Division 4 financial product.

(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;

(d) the prescribed CS facility operated by ASTC;

(e) if TNS Clearing Pty Limited is the counter‑party in the transaction—TNS Clearing Pty Limited;

(f) if Options Clearing House Pty Limited is the counter‑party in the transaction—Options Clearing House Pty Limited.

(3) For this regulation, the effect of regulation 7.11.26 is to be disregarded in determining whether a person:

(a) was legally entitled or authorised to transfer Division 4 financial products; or

(b) was authorised by another person to effect a transfer of Division 4 financial products.

7.11.32 Indemnities in respect of warranted matters: participant not authorised to effect transfer

(1) This regulation applies if:

(a) a participant is taken by regulation 7.11.29 to have warranted, in relation to a proper ASTC transfer of a Division 4 financial product, that the participant was authorised by the transferor to effect the transfer; and

(b) the participant was not authorised by the transferor to effect the transfer.

(2) The participant is liable to indemnify each of the following against any loss or damage arising from the participant not having been authorised by the transferor to effect the transfer:

(a) the issuer in relation to the Division 4 financial product;

(b) the transferor;

(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.

(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

(d) a deed relating to interests.

7.11.36 Issuer not to refuse to register proper ASTC transfer

The issuer in relation to a Division 4 financial product must not:

(a) refuse or fail to register a proper ASTC transfer of the Division 4 financial product; or

(b) refuse or fail to give effect to a proper ASTC transfer of the Division 4 financial product.

7.11.37 Determination of who holds Division 4 financial products for the purposes of meeting

(1) This regulation applies to a meeting of the holders of securities of a body corporate if some or all of the securities are Division 4 financial products.

(2) The convener of the meeting may determine that all the securities of the body corporate that are Division 4 financial products at a specified time before the meeting are taken, for the purposes of the meeting, to be held by the persons who held them at the specified time.

(3) The specified time:

(a) must satisfy any applicable requirements of the ASTC operating rules; but

(b) in any case, must not be more than 48 hours before the meeting.

(4) The convenor must make a determination:

(a) in accordance with any applicable requirements of the ASTC operating rules as to the way in which it must be made; but

(b) in any case, before notice of the meeting is given.

(5) The convenor must include particulars of the determination in the notice of the meeting.

(6) However, a failure to include particulars of the determination in the notice of the meeting does not invalidate the determination.

(7) The convenor’s determination has effect accordingly despite anything in:

(a) the Act; and

(b) these Regulations; and

(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.

(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

(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

(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

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

(i) the transferor’s broker; or

(ii) authorised to stamp the document on the transferor’s broker’s behalf.

(3) A market licensee must not stamp with a stamp of the market licensee a document that may be used as a sufficient transfer under this Part of Division 3 securities unless:

(a) a duly completed Part 1, relating to the Division 3 securities, has been lodged with the issuer in relation to the Division 3 securities; or

(b) the market licensee holds a duly completed Part 1 that:

(i) bears a certificate that purports to be that of the transferor’s broker; and

(ii) states that a duly completed Part 1, relating to the Division 3 securities, has been lodged or will be lodged with the issuer in relation to the Division 3 securities.

(4) A person must not execute a document that:

(a) may be used as a sufficient transfer under regulation 7.11.12 or 7.11.13; and

(b) relates to a transfer of Division 3 securities:

(i) made by way of a sale, gift or exchange of the Division 3 securities; or

(ii) to or in favour of a person who is not the beneficial owner of the Division 3 securities.

(5) A person who is not a licensed trustee company, 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

(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.

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.

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.

Chapter 8—Mutual recognition of securities offers

Part 8.1—Preliminary

8.1.01 Meaning of foreign recognition scheme

For the definition of foreign recognition scheme in subsection 1200A(1) of the Act, the provisions of Subpart 6 of Part 9 of the Financial Markets Conduct Act 2013 of New Zealand and the Financial Markets Conduct Regulations 2014 of New Zealand comprise a foreign recognition scheme.

8.1.02 Meaning of offeror—prescribed offer and kind of person

For the purposes of subparagraph (c)(ii) of the definition of offer in section 9 of the Act:

(a) an offer of an interest in a managed investment scheme governed by the laws of New Zealand is prescribed as a kind of offer; and

(b) for that offer, if the scheme is a managed investment scheme within the meaning of the Financial Markets Conduct Act 2013 of New Zealand—the offeror is the manager of the managed investment scheme as defined in that Act.

8.1.03 Meaning of recognised jurisdiction

For the definition of recognised jurisdiction in subsection 1200A(1) of the Act, New Zealand is prescribed.

Part 8.2—Foreign offers that are recognised in this jurisdiction

Division 1—Recognised offers

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

For subsection 1200C(4) of the Act an offer of a security is a prescribed offer in relation to New Zealand if a disclosure document (as defined in the Financial Markets Conduct Act 2013 of New Zealand) must be prepared in accordance with:

(a) the Financial Markets Conduct Act 2013 of New Zealand; or

(b) the Financial Markets Conduct Regulations 2014 of New Zealand.

Note: For the purpose of Chapter 8 of the Act and Chapter 8 of these regulations, a security does not include all of the financial products defined as securities in the Financial Markets Conduct Act 2013 of New Zealand—see the definition of securities in subsection 92(7) of the Act. For example, a security does not include an interest in a superannuation scheme or a life insurance policy.

8.2.02 Prescribed warning statements (Act s 1200E)

(1) For paragraph 1200E(a) of the Act, the following statements are prescribed:

(a) this offer to Australian investors is a recognised offer made under Australian and New Zealand law. In Australia, this is Chapter 8 of the Corporations Act 2001 and Regulations. In New Zealand, this is Subpart 6 of Part 9 of the Financial Markets Conduct Act 2013 of New Zealand and the Financial Markets Conduct Regulations 2014 of New Zealand;

(b) this offer and the content of the offer document are principally governed by New Zealand, rather than Australian, law. In the main, the Financial Markets Conduct Act 2013 of New Zealand and the Financial Markets Conduct Regulations 2014 of New Zealand set out how the offer must be made;

(c) there are differences in how securities and financial products are regulated under New Zealand, as opposed to Australian, law. For example, the disclosure of fees for managed investment schemes is different under New Zealand law;

(d) the rights, remedies and arrangements for compensation available to Australian investors in New Zealand securities and financial products may differ from the rights, remedies and arrangements for compensation for Australian securities and financial products;

(e) both the Australian and New Zealand securities regulators have enforcement responsibilities in relation to this offer. If you need to make a complaint about this offer, please contact the Australian Securities and Investments Commission (ASIC). The Australian and New Zealand regulators will work together to settle your complaint;

(f) the taxation treatment of New Zealand securities and financial products is not the same as that for Australian securities and products;

(g) if you are uncertain about whether this investment is appropriate for you, you should seek the advice of an appropriately qualified financial advisor.

(2) For paragraph 1200E(a) of the Act, the following additional warning statements are prescribed for offers involving the payment of proceeds, from securities or financial products, that are not Australian dollars:

(a) The offer may involve a currency exchange risk. The currency for the security or financial product is in dollars that are not Australian dollars. The value of the security or financial product will go up and down according to changes in the exchange rate between those dollars and Australian dollars. These changes may be significant;

(b) If you receive any payments in relation to the security or financial product that are not in Australian dollars, you may incur significant fees in having the funds credited to a bank account in Australia in Australian dollars.

(3) For paragraph 1200E(a) of the Act, the following additional warning statement is prescribed for offers involving securities and financial products, able to be traded on a financial market:

If the security or financial product is able to be traded on a financial market and you wish to trade the security or financial product through that market, you will have to make arrangements for a participant in that market to sell the security or financial product on your behalf. If the financial market is a foreign market that is not licensed in Australia (such as a securities market operated by the New Zealand Exchange Limited (NZX)) the way in which the market operates, the regulation of participants in that market and the information available to you about the security or financial product and trading may differ from Australian licensed markets.

8.2.03 Prescribed details to be given in warning statements (Act s 1200E(b))

For paragraph 1200E(b) of the Act, if a matter is referred to in an item of the Table, the details in the item are prescribed for the matter.

Item	Matter	Details to be provided
1	An offer to invest in a managed 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

(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

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

Financial Markets Authority of New Zealand

Each matter mentioned in items 5 to 7 of the Table at subsection 1200G(9) of the Act

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.

Chapter 8A—Asia Region Funds Passport

Part 8A.4—Notified foreign passport funds

Division 1—Becoming a notified foreign passport fund

8A.4.10 Rejecting a notice of intention—name of fund identical to another or unacceptable

(1) For the purposes of subparagraphs 1213B(5)(a)(i), (ii), (iii) and (iv) of the Act, the rules for ascertaining whether a name is identical with another name are the rules set out in Part 1 of Schedule 6.

(2) For the purposes of subparagraph 1213B(5)(a)(v) of the Act, a name is unacceptable for registration under the regulations if it is unacceptable under the rules set out in Part 2 of Schedule 6.

Division 4—Providing key information in relation to notified foreign passport funds

8A.4.40 Register of members—purposes for which a person may obtain and use a copy

For the purposes of paragraph 1213K(2)(c) (and paragraph 1213L(3)(a)) of the Act, the following purposes are prescribed:

(a) soliciting a donation from a member of a notified foreign passport fund;

(b) soliciting a member of a notified foreign passport fund by a person who is authorised to assume or use the word stockbroker or sharebroker in accordance with section 923B of the Act;

(d) making an offer that satisfies paragraphs 1019D(1)(a) to (d) of the Act;

(e) making an invitation that, were it an offer to purchase a financial product, would be an offer that satisfies paragraphs 1019D(1)(a) to (d) of the Act.

Note: Section 1019D of the Act deals with unsolicited offers to purchase financial products off‑market.

8A.4.45 Destruction of records by ASIC—period before documents may be destroyed

For the purposes of paragraph 1213Q(b) of the Act, the period of possession is 7 years.

Part 8A.5—Register of passport funds

8A.5.10 Prescribed details for the Register of Passport Funds

Prescribed details of Australian passport funds

(1) For the purposes of paragraph 1214(3)(a) of the Act, the following details are prescribed for each Australian passport fund:

(a) the APFRN for the fund;

(b) the name of the fund;

(ca) the ARFN of the sub‑fund of a CCIV that constitutes the fund;

(d) a statement that the fund is registered as an Australian passport fund;

(e) the date on which the fund was registered as an Australian passport fund;

(f) if the fund has or had a name in a participating economy (including Australia) that is different from its current name in Australia, then for each name that the fund has or had in a participating economy:

(i) that name; and

(ii) the name of each participating economy in which the fund has or had that name; and

(iii) for each such economy—the start date and (if applicable) the end date of each period during which the fund has or had that name in that economy;

(g) the name, ACN and ABN (if any) of the operator of the fund;

(h) if the fund has at any time had an operator with a name, ACN or ABN that is different from the name, ACN or ABN (as the case requires) mentioned in paragraph (g):

(i) that other name, ACN or ABN; and

(ii) the start date and the end date of each period during which an operator of the fund has had that other name, ACN or ABN;

(i) the review date for the fund;

(j) for each financial year for the fund—the name of each auditor of a financial report for the fund for that year;

(k) for each review period for the fund for which the fund is required under section 15 of the Passport Rules for this jurisdiction to conduct an implementation review—the name of the implementation reviewer.

(2) For the purposes of paragraph 1214(3)(b) of the Act, the following details are prescribed for each fund that has been deregistered as an Australian passport fund:

(a) the details that were prescribed for the fund under subregulation (1) immediately before the fund was deregistered, except for the details that were prescribed under paragraph (1)(d);

(b) a statement that the fund has been deregistered;

(d) a statement indicating which of the following the fund was deregistered under:

(i) Division 2 of Part 5C.10 of the Act (deregistration as an Australian passport fund as a result of deregistration as a registration scheme);

(ii) Subdivision A of Division 1 of Part 8A.7 of the Act (voluntary deregistration);

(iii) Subdivision B of Division 1 of Part 8A.7 of the Act (deregistration initiated by ASIC).

Prescribed details of notified foreign passport funds

(3) For the purposes of paragraph 1214(3)(a) of the Act, the following details are prescribed for each notified foreign passport fund:

(a) the NFPFRN for the fund and any other unique number for the fund allocated to the fund by ASIC;

(b) the name of the fund;

(d) the name of the home economy for the fund;

(e) the date on which the fund became a notified foreign passport fund;

(i) that name; and

(ii) the name of each participating economy in which the fund has or had that name; and

(iii) for each such economy—the start date and (if applicable) the end date of each period during which the fund has or had that name in that economy;

(g) the name and ARBN of the operator of the fund;

(h) if the fund has at any time had an operator with a name or ARBN that is different from the name or ARBN (as the case requires) mentioned in paragraph (g):

(i) that other name or ARBN; and

(ii) the start date and the end date of each period during which an operator of the fund has had that other name or ARBN;

(i) the review date for the fund;

(j) for each financial year for the fund—the name of each auditor of a report for the fund for that year that is prepared in accordance with the financial reporting requirements applying to the fund under the Passport Rules for the home economy for the fund;

(4) For the purposes of paragraph 1214(3)(b) of the Act, the following details are prescribed for each fund that has been removed as a notified foreign passport fund:

(a) the details that were prescribed for the fund under subregulation (3) immediately before the fund was removed, except for the details that were prescribed under paragraph (3)(c);

(b) a statement that the fund has been removed;

(d) a statement indicating which of the following the fund was removed under:

(i) Subdivision A of Division 2 of Part 8A.7 of the Act (voluntarily denotification);

(ii) Subdivision B of Division 2 of Part 8A.7 of the Act (denotification as a result of deregistration as a passport fund in the home economy for the fund).

Definitions

(5) In this regulation:

implementation reviewer, for a passport fund, has the same meaning as in the Passport Rules for this jurisdiction.

review period, for a passport fund, has the meaning given by subsection 15(1) of the Passport Rules for this jurisdiction.

Part 8A.7—Deregistration and denotification

8A.7.10 Authority

This Part is made under section 1216L of the Act.

8A.7.15 Continued application of Corporations legislation to deregistered Australian passport funds

(1) During the transition period for a fund that has been deregistered as an Australian passport fund, each of the following continues to apply in relation to the fund as if it were an Australian passport fund:

(a) Part 1.2A and any provisions of the Act dealing with disclosing entities;

(b) Chapters 2C, 2D, 2F, 2G, 2M, 2N and 2P;

(d) Chapter 7;

(e) Part 8A.1, Part 8A.2, section 1212B, Part 8A.5, Part 8A.6, Part 8A.7 and Part 8A.8;

(f) Chapter 9;

(g) the remaining provisions of the Corporations legislation, to the extent that they apply:

(i) in relation to a provision mentioned in paragraphs (a) to (f); or

(ii) in relation to compliance with or enforcement of a provision mentioned in paragraphs (a) to (f).

Note: A fund may be deregistered as an Australian passport fund under Division 1 of Part 8A.7 of the Act or under Division 2 of Part 5C.10 of the Act.

(2) In this regulation, the transition period for a fund that has been deregistered as an Australian passport fund is the period:

(a) beginning on the day on which the fund is deregistered as an Australian passport fund (see subsection 1216D(3) of the Act); and

(b) ending on the last day on which there are any protected members of the fund.

(3) A person is a protected member of a fund that has been deregistered as an Australian passport fund if the person became a member of the fund (whether in this jurisdiction or any host economy for the fund):

(a) after the fund became an Australian passport fund; or

(b) on the expectation that the fund would become an Australian passport fund.

(4) For the purposes of the definition of protected member in subregulation (3), ignore any member of the fund that:

(a) is, or has at any time been, the operator of the fund; or

(b) is a related party of an entity that is, or has at any time been, the operator of the fund.

(5) If a fund has been deregistered as an Australian passport fund, a reference to the operator in relation to the fund in:

(a) this regulation; or

(b) any provision of the Corporations legislation the application of which is continued under subregulation (1);

is a reference to the responsible entity for the registered scheme that constitutes the fund or, if the fund has ceased to be a registered scheme, the entity or entities that control the fund.

8A.7.20 Continued application of Corporations legislation to funds that have been removed as notified foreign passport funds

(1) During the transition period for a fund that has been removed as a notified foreign passport fund, each of the following continues to apply in relation to the fund as if it were a notified foreign passport fund:

(a) Part 1.2A and any provisions of the Act dealing with disclosing entities;

(b) Chapters 2C, 2D, 2F, 2G, 2M, 2N and 2P;

(d) Chapter 7;

(e) Part 8A.1, Part 8A.2, Divisions 2, 3 and 4 of Part 8A.4, Part 8A.5, Part 8A.6, Part 8A.7 and Part 8A.8;

(f) Chapter 9;

(g) the remaining provisions of the Corporations legislation, to the extent that they apply:

(i) in relation to a provision mentioned in paragraphs (a) to (f); or

(ii) in relation to compliance with or enforcement of a provision mentioned in paragraphs (a) to (f).

Note: A fund may be removed as a notified foreign passport fund under Division 2 of Part 8A.7 of the Act.

(2) In this regulation, the transition period for a fund that has been removed as a notified foreign passport fund is the period:

(a) beginning on the day on which the fund is removed as a notified foreign passport fund (see subsection 1216J(3)); and

(b) ending on the last day on which there are any protected members of the fund.

(3) A person is a protected member of a fund that has been removed as a notified foreign passport fund if the person became a member of the fund (whether in this jurisdiction or any other participating economy for the fund):

(a) after the fund became a notified foreign passport fund; or

(b) on the expectation that the fund would become a notified foreign passport fund.

(4) For the purposes of the definition of protected member in subregulation (3), ignore any member of the fund that:

(a) is, or has at any time been, the operator of the fund; or

(b) is a related party of an entity that is, or has at any time been, the operator of the fund.

(5) If a fund has been removed as a notified foreign passport fund, a reference to the operator in relation to the fund in:

(a) this regulation; or

(b) any provision of the Corporations legislation the application of which is continued under subregulation (1);

is a reference to the operator of the regulated CIS that constitutes the fund or, if the fund has ceased to be a regulated CIS, the entity or entities that control the fund.

Chapter 8B—Corporate collective investment vehicles

Part 8B.4—Corporate finance and financial reporting for CCIVs

Division 1—Shares

8B.4.10 Cross investment between sub‑funds of a CCIV—restriction for circular cross‑investment

For the purposes of subsection 1230R(1) of the Act, a CCIV must not acquire, in respect of a sub‑fund of the CCIV (the acquiring sub‑fund), one or more shares referable to another sub‑fund of the CCIV (the issuing sub‑fund) if, at the time of the proposed acquisition, the assets of the issuing sub‑fund:

(a) directly include; or

(b) indirectly include, through one or more interposed sub‑funds of the CCIV;

one or more shares referable to the acquiring sub‑fund.

Note: Paragraph (b) applies if, for example, at the time of the proposed acquisition:

(a) the assets of the issuing sub‑fund include shares referable to sub‑fund C of the CCIV; and

(b) the assets of sub‑fund C include shares referable to sub‑fund D of the CCIV; and

In this example, sub‑funds C and D are each interposed sub‑funds.

8B.4.15 Cross investment between sub‑funds of a CCIV—requirements and restrictions on membership rights

(1) For the purposes of paragraph 1230T(3)(b) of the Act, a CCIV’s entitlement, as described in subsection 1230T(2) of the Act, to vote:

(a) in respect of each share that the CCIV has acquired in respect of a sub‑fund of the CCIV (the first sub‑fund) and that is referable to another sub‑fund of the CCIV (the second sub‑fund); and

(b) as a member of the second sub‑fund on a resolution (the relevant resolution) at a meeting of the members of the second sub‑fund;

is subject to the requirement and restriction mentioned in subregulation (2).

(2) For the purposes of subregulation (1), there is:

(a) a requirement that the CCIV must vote, in respect of each such share, on the relevant resolution in the way determined by resolution of the members of the first sub‑fund; and

(b) a restriction that the CCIV must not vote, in respect of each such share, on the relevant resolution if a resolution that determines the way the CCIV must vote on the relevant resolution is not made by the members of the first sub‑fund.

Division 4—Financial reports and audit of CCIVs

8B.4.40 Keeping financial records for sub‑funds—further requirement for cross‑investment

(1) For the purposes of paragraph 1232A(1)(c) of the Act, the written financial records that a CCIV must keep, for each sub‑fund of the CCIV, must comply with the further requirement set out in subregulation (2).

(2) Those records must correctly and clearly identify and explain all cross‑investment between the sub‑fund and any other sub‑fund of the CCIV.

8B.4.45 Annual financial reports for sub‑funds—further requirement for cross‑investment

(1) For the purposes of subsection 1232D(3) of the Act, a retail CCIV’s financial report for a sub‑fund (the reporting sub‑fund) for a financial year must comply with:

(a) the further requirements set out in subregulation (2) to the extent that the assets of the reporting sub‑fund include shares in the CCIV referable to another sub‑fund of the CCIV; and

(b) the further requirements set out in subregulation (3) to the extent that the assets of another sub‑fund of the CCIV include shares in the CCIV referable to the reporting sub‑fund.

Requirements for the reporting sub‑fund as an investor sub‑fund

(2) The report must ensure that disclosures of the following are included in the notes to the financial statements of the reporting sub‑fund for the financial year:

(a) the total number of shares in the CCIV that:

(i) are assets of the reporting sub‑fund; and

(ii) are referable to other sub‑funds of the CCIV at the end of the financial year;

(b) the total value of those shares at the end of the financial year and expressed in Australian dollars;

(c) so much of each of the totals in paragraphs (a) and (b) as relates to the shares referable to each of those other sub‑funds.

Requirements for the reporting sub‑fund as an investee sub‑fund

(3) The report must ensure that disclosures of the following are included in the notes to the financial statements of the reporting sub‑fund for the financial year:

(a) for the shares in the CCIV referable to the reporting sub‑fund of the CCIV:

(i) the total number of those shares that are assets of other sub‑funds of the CCIV at the start of the financial year; and

(ii) the total number of those shares that become assets of one or more other sub‑funds of the CCIV at any time during the financial year; and

(iii) the total number of those shares that cease to be assets of one or more other sub‑funds of the CCIV at any time during the financial year; and

(iv) the total number of those shares that are assets of other sub‑funds of the CCIV at the end of the financial year;

(b) all of the following:

(i) for the shares covered by subparagraph (a)(i)—the total value of those shares at the start of the financial year and expressed in Australian dollars;

(ii) for the shares covered by subparagraph (a)(ii)—the total value of those shares, worked out using the value of each share at the time the share becomes an asset as mentioned in that subparagraph, and expressed in Australian dollars;

(iii) for the shares covered by subparagraph (a)(iii)—the total value of those shares, worked out using the value of each share at the time the share ceases to be an asset as mentioned in that subparagraph, and expressed in Australian dollars;

(iv) for the shares covered by subparagraph (a)(iv)—the total value of those shares at the end of the financial year and expressed in Australian dollars;

(c) so much of each of the totals in paragraphs (a) and (b) as relates to the shares that are assets of each of those other sub‑funds of the CCIV.

8B.4.50 Combining financial reports, and directors’ reports etc., for sub‑funds of the same CCIV

(1) This regulation deals with how the provisions (the reporting provisions) of Part 2M.3 of the Act (as modified by Chapter 8B of the Act) apply to a retail CCIV.

(2) For the purposes of section 343 and subsection 1243A(1) of the Act, this regulation modifies the operation of the reporting provisions to the extent that, apart from those modifications, the reporting provisions could not alternatively apply to:

(a) a single financial report for a financial year covering one or more sub‑funds of the CCIV; or

(b) a single directors’ report for a financial year covering one or more sub‑funds of the CCIV; or

(d) a single auditor’s report on the financial report referred to in paragraph (a) of this subregulation; or

(e) a single concise report (see paragraph 1232H(1)(b) of the Act) for a financial year covering one or more sub‑funds of the CCIV.

Note 1: Not all of the sub‑funds of the CCIV need to be covered by one of these single reports if the CCIV chooses. The reporting provisions will continue to apply, unmodified by this regulation, for any sub‑funds not covered by the report.

Note 2: All of the sub‑funds covered by one of these single reports must be sub‑funds of the same CCIV. The report cannot cover sub‑funds of different CCIVs, even if the CCIVs share the same corporate director.

(3) The report referred to in paragraph (2)(d) must be prepared by a single auditor, audit firm or audit company.

(4) Each single report referred to in subregulation (2) must be prepared so that each of the matters covered by the report is shown so that the matter is clearly identifiable for each of the sub‑funds covered by the report.

Part 8B.5—Operating a CCIV

8B.5.10 Who may hold CCIV assets—minimum standards and other requirements

(1) For the purposes of subsection 1234G(2) of the Act, the money and property of a CCIV may be held by a person other than the CCIV if:

(a) the corporate director of the CCIV is satisfied that the minimum standards in subregulation (2) are met:

(i) for the person; and

(ii) for the period in which the person is engaged to perform the function of holding the money and property of the CCIV; and

(b) the corporate director monitors the person’s compliance with the minimum standards during that period; and

(c) the corporate director undertakes a review of the person’s compliance with the minimum standards every 13 months starting on the day the person is engaged to perform the function of holding the money and property of the CCIV; and

(d) the corporate director makes available to ASIC, on request, the outcomes of the review.

(2) For the purposes of subregulation (1), the minimum standards for holding the money and property of a CCIV are met for a person and a period if:

(a) during the period, the person has adequate capacity and resources to hold the money and property of the CCIV; and

(b) in the case that the person performs other functions for the CCIV at any time during the period—the person has in place, at that time, adequate arrangements for the management of conflicts of interest that may arise wholly, or partially, in relation to activities undertaken by the person in performing the other functions.

8B.5.15 Holding money and property of a CCIV on trust—exception

(1) For the purposes of subsection 1234K(1) of the Act, subsection 1234H(1) of the Act does not apply to the class of assets that is the money or property of a CCIV that is held outside of Australia in another jurisdiction in the circumstance mentioned in subregulation (2)

(2) For the purposes of subregulation (1), the circumstance is that:

(a) it is not reasonable for the money or property of the CCIV to be held on trust under the laws in force in the other jurisdiction; and

(b) there are adequate safeguards in place for protecting the money or property of the CCIV, including if the person holding the money or property of the CCIV becomes insolvent.

8B.5.20 Holding money and property of a CCIV separately—exception and other requirements for certain classes of assets

(1) For the purposes of subsections 1234K(1) and (2) of the Act, subsections 1234J(1) to (3) of the Act do not apply in relation to the class of assets of a sub‑fund of a CCIV that consists of assets that:

(a) are of any of the following kinds (the prescribed assets):

(i) Australian or foreign currency;

(ii) rights to Australian or foreign currency that is held in a deposit‑taking facility made available by an ADI (within the meaning of the Banking Act 1959);

(iii) rights to Australian or foreign currency that is held in a deposit‑taking facility made available by a body corporate that is authorised to carry on a banking business (within the meaning of that Act) in a foreign country;

(iv) securities;

(v) derivatives; and

(b) are held in accordance with the requirements mentioned in subregulation (2).

(2) For the purposes of subregulation (1), the following requirements apply in relation to the holding, by a person, of assets of a sub‑fund of a CCIV that are prescribed assets:

(a) a requirement that the person holds the prescribed assets separately from any money or property of the person;

(b) a requirement that there are adequate safeguards in place for the protection of the prescribed assets, including if the assets of another sub‑fund of the CCIV or the assets of another entity are subject to external administration;

(c) a requirement that the person do all things necessary to ensure that not holding the prescribed assets in accordance with subsections 1234J(1) to (3) of the Act does not restrict the CCIV’s capacity to exercise any rights in respect of the prescribed assets;

(d) a requirement that the person do all things necessary to ensure that a reconciliation of the prescribed assets occurs:

(i) each business day; or

(ii) if it is ordinary and reasonable, in commercial practice, to reconcile assets of the same class less frequently—as frequently as reconciliation of assets of that class would occur in accordance with that practice;

(e) if there is a discrepancy in the reconciliation of the prescribed assets—a requirement that the person do all things necessary to rectify the discrepancy within the period of 2 business days starting after the day the person identifies, or becomes aware of, the discrepancy;

(f) a requirement that the person:

(i) keep adequate records of the prescribed assets; and

(ii) provide reasonable assistance to the corporate director of the CCIV.

Note: For the purposes of paragraph (e), one of the ways a discrepancy may be rectified is through the provision of additional property by the CCIV at the request of the person holding the property.