Corporations Regulations 2001

For paragraph 9B(2)(f) of the Act, a recommendation, or advice or information, provided in relation to one or more members of the key management personnel for a company by an employee of a company within the same consolidated entity, is not a remuneration recommendation.

A notice to be lodged under subsection 172(2) of the Act must be in a form approved by ASIC (if a form has been approved).

For subsection 173(3) of the Act, a copy of a register must be provided as a delimited text file:

produced by a commercially available spreadsheet or database application; and

copied onto a CD-ROM or a USB portable memory device.

For paragraph 173(3A)(b) of the Act, the following purposes are prescribed:

soliciting a donation from a member of a company;

soliciting a member of a company by a person who is authorised to assume or use the word stockbroker or sharebroker in accordance with section 923B of the Act;

gathering information about the personal wealth of a member of a company;

making an offer that satisfies paragraphs 1019D(1)(a) to (d) of the Act;

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: See subsection 1019D(1) of the Act for a description of unsolicited offers to purchase financial products off-market.

For paragraph 173(3A)(c) of the Act, the information that must be contained in an application is the name and address of the applicant.

Note: An application must also state the purpose for accessing a copy of a register—see subsection 173(3A) of the Act.

This regulation applies if a body corporate mentioned in regulation 12.8.02 has failed to give a person a copy of the part of the register of members of the body who hold member shares:

within 28 days after the person’s request for a copy; or

if a longer period has been allowed by ASIC—within the longer period.

If the person:

makes a statutory declaration that the person intends to use information that is contained in that part of the register:

for the purpose of contacting members of the body, or sending material to members of the body, for a purpose mentioned in subsection 177(1A) of the Act; and

in a way that does not contravene that subsection or another law; and

gives the statutory declaration to the body corporate; and

pays the reasonable costs of contacting the members, or sending material to the members;

the body corporate must do everything that is reasonably possible to arrange for the members to be contacted, or for the material to be sent to the members, on the person’s behalf by a third party service provider nominated by the body corporate.

If the body corporate believes on reasonable grounds that the person intends to use information that is contained in that part of the register:

for a purpose that is not in accordance with subparagraph (2)(a)(i); or

in a way that is not in accordance with subparagraph (2)(a)(ii);

the body corporate is not required to arrange for the members to be contacted or for the material to be sent to the members on the person’s behalf, and may terminate any existing arrangement.

The arrangements made by the body corporate must ensure that, to the extent reasonably possible:

the details, from the register of members, of each member to whom material is to be sent, or with whom contact is to be made, will be provided to the third party service provider within 14 days after the person pays the costs mentioned in subregulation (2); and

a copy of any material that is to be sent to a member will be provided to the third party service provider within 28 days after the person provides the material to the body corporate; and

if material is not to be sent to a member—written details of the contact that is to be made with a member must be provided to the third party service provider within 28 days after the person provides the written details to the body corporate; and

for any material that is to be sent to a member—the material will be sent to the member within 14 days after the body corporate provides the material to the third party service provider; and

if material is not to be sent to a member—contact will be made with the member within 14 days after the body corporate provides, to the third party service provider, the written details of the contact that is to be made with the member.

An arrangement made under subregulation (2) must:

allow for contact to be made, or material to be sent, for a period of 6 months after the period mentioned in subregulation (1); and

require the person to pay the reasonable costs of contacting the members or sending material to the members to be paid on each occasion before the contact is made or the material is sent.

A reference in subregulation (1) to the register of members of a body corporate who hold member shares includes a reference to:

the register of members of a body corporate that is a company limited by guarantee; and

the register of members of a body corporate limited by shares and guarantee, who do not hold shares in the body.

(1) For the definition of base salary in section 9 of the Act, the matters specified in the following table are base salary.

For subregulation (1):

if a person has held an office in relation to a company:

throughout a period of more than 12 months; or

throughout a number of periods of more than 12 months in total;

the relevant period for that person is the last 12 months of that period or the last 12 months of the total period; and

if a person has held an office in relation to a company:

throughout a period of 12 months or less; or

throughout a number of periods of 12 months or less in total;

the relevant period for that person is that period or the total period.

For paragraph 200AB(1)(e) of the Act, each of the following things is specified:

any kind of pension, other than a pension paid from a superannuation fund or a superannuation annuity (whether it is paid from an Australian or a foreign fund);

an amount paid as a voluntary out-of-court settlement in a matter relating to the termination of employment;

a payment:

that is made as part of a restrictive covenant, restraint-of-trade clause or non-compete clause (however described); and

the value of which, when added to the value of all other payments (if any) already made or payable in connection with the person’s retirement from board or managerial offices in the company and related bodies corporate, exceeds the payment limit set by section 200G of the Act.

Note: Subsection 200AB(1) of the Act provides that a benefit includes specified things. Paragraph 200AB(1)(e) of the Act provides that a benefit includes a thing specified in regulations. Things that are not specified in subsection 200AB(1) of the Act or subregulation (1) may also be benefits for the purposes of the Act.

For subsection 200AB(2) of the Act, each of the following things is specified:

a deferred bonus, including a benefit attributable to:

the release of the deferred bonus from a restriction relating to death or incapacity; or

the investment of the deferred bonus; or

another change to the value of the deferred bonus;

a payment from a defined benefits superannuation scheme that was in existence when this regulation commenced;

a genuine superannuation contribution that is paid by an employer or employee on or after the commencement of this regulation;

genuine accrued benefits that are payable under a law within the meaning of section 200H of the Act;

a payment made under a requirement imposed by a law of another country;

a reasonable payment that is made:

in accordance with a policy of the company or body that applies to all employees; and

as a result of a genuine redundancy; and

having regard to the length of a person’s service in an office or position;

a payment from a prescribed superannuation fund due to death or incapacity.

Example for paragraph (d): A payment of annual leave, long service leave or sick leave.

Note: Subsection 200AB(2) of the Act provides that a benefit does not include a thing specified in regulations. Things that are not specified in subregulation (2) may also not be benefits for the purposes of the Act.

In this regulation:

deferred bonus includes an amount, or property, that: is earned by, accrued by or allocated to a person as remuneration in respect of a period of employment before the person’s retirement; and is not paid, provided or released to the person at the time at which it is earned, accrued or allocated.

is earned by, accrued by or allocated to a person as remuneration in respect of a period of employment before the person’s retirement; and

is not paid, provided or released to the person at the time at which it is earned, accrued or allocated.

prescribed superannuation fund has the meaning given by section 200B of the Act.

For subsection 200A(1A) of the Act, each of the following circumstances is specified in relation to a benefit:

circumstances in which the benefit is the automatic vesting of share-based payments for a person on or as a result of retirement from an office or a position;

circumstances in which the benefit is the accelerated vesting of share-based payments for a person on or as a result of retirement from an office or a position; and

circumstances in which the benefit is a payment made to a person in lieu of the giving of notice of termination.

Note: Subsection 200A(1A) of the Act provides that a benefit is given in connection with a person’s retirement from an office or a position if the benefit is given in circumstances specified in regulations.

For paragraph 200F(1)(b) of the Act, a benefit requires shareholder approval:

if it:

is a deferred bonus under paragraph 2D.2.02(2)(a); and

is subject to automatic or accelerated vesting under subregulation (1); and

exceeds the payment limit set by section 200G of the Act; and

if it is not a benefit attributable to the release of a deferred bonus from a restriction due to death or incapacity.

For section 206B of the Act, a foreign country, or part of a foreign country, mentioned in the following table is prescribed.

For subsection 250A(1) of the Act, an electronic authentication of an appointment of a proxy must include:

a method of identifying the member; and

an indication of the member’s approval of the information communicated.

If a member appoints a proxy by e-mail or Internet-based voting:

the member must be identified by personal details (for example, the member’s name, address and date of birth); and

the member’s approval of the information communicated must be communicated by a form of security protection (for example, the entering of a confidential identification number such as a shareholder registration number or holder identification number).

For paragraph 295(3)(a) of the Act, if paragraph 295(2)(b) of the Act applies to a parent entity, the following disclosures are required in the notes to the financial statements of the consolidated entity:

current assets of the parent entity;

total assets of the parent entity;

current liabilities of the parent entity;

total liabilities of the parent entity;

shareholders’ equity in the parent entity separately showing issued capital and each reserve;

profit or loss of the parent entity;

total comprehensive income of the parent company;

details of any guarantees entered into by the parent entity in relation to the debts of its subsidiaries;

details of any contingent liabilities of the parent entity;

details of any contractual commitments by the parent entity for the acquisition of property, plant or equipment;

comparative information for the previous period for each of paragraphs (a) to (j).

The disclosures in subregulation (1) must be calculated in accordance with accounting standards in force in the financial year to which the disclosure relates.

In this regulation:

parent entity means a company, registered scheme, registrable superannuation entity or disclosing entity that is required by the accounting standards to prepare financial statements in relation to a consolidated entity.

For paragraph 300A(1)(c) of the Act, the details set out in the table relating to a person are prescribed.

For items 6, 7, 8, 9 and 11 of the table:

the information of the kind described in the item for the previous financial year must also be disclosed in the financial year to which the item relates (to give comparative information for the purposes of the item); but

paragraph (a) does not apply in relation to the first financial year in which paragraph 300A(1)(c) of the Act applies in relation to a person.

Note: The effect of paragraph (b) is that no comparative information is required in the first period of reporting on a specific individual.

For items 15 to 19 of the table, a disclosure required by the item must:

be separated into each class of equity instrument; and

identify each class of equity instrument by:

the name of the disclosing entity or the relevant subsidiary that issued the equity instrument; and

the class of equity instrument; and

if the instrument is an option or right—the class and number of equity instruments for which it may be exercised.

For items 20 and 21 of the table in subregulation (1), loans do not include loans involved in transactions that are in substance options, including non-recourse loans.

A transaction with, or an amount that is receivable from or payable under a transaction to, a key management person, a close member of the family of that person, or an entity over which the person or the family member has, directly or indirectly, control, joint control or significant influence, is excluded from the requirements of items 22 to 24 if:

the transaction occurs within a normal employee, customer or supplier relationship on terms and conditions no more favourable than those that it is reasonable to expect the entity would have adopted if dealing at arms-length with an unrelated person; and

information about the transaction does not have the potential to affect adversely decisions about the allocation of scarce resources made by users of the financial statements, or the discharge of accountability by the key management person; and

the transaction is trivial or domestic in nature.

Items 17 to 24 of the table in subregulation (1) apply in relation to a directors’ report for a financial year commencing on or after 1 July 2013.

For subregulation (1), a company must apply the requirements of relevant accounting standards when disclosing the information mentioned in the subregulation.

In subregulation (1), an expression that is:

used in the subregulation; and

defined in a relevant accounting standard that is applied for the purpose of disclosing information;

has the meaning given by that accounting standard.

For the purposes of paragraph 300C(1)(a) of the Act, the details in the following table in relation to the remuneration of each member of the key management personnel of a registrable superannuation entity are prescribed.

If:

a member of the key management personnel receives a payment, benefit or compensation from a related party of the registrable superannuation entity; and

all or part of the payment, benefit or compensation relates to work performed for the registrable superannuation entity;

then, to the extent that the payment, benefit or compensation relates to that work, the table applies to the payment, benefit or compensation in the same way as if it were paid or given by the registrable superannuation entity.

The details referred to in item 14 or 15 of the table must be separated into each class of equity instrument, and each class of equity instrument must be identified by:

the name of the issuing entity; and

the class of equity instrument; and

if the instrument is an option or right—the class and number of equity instruments for which it may be exercised.

Accounting standards apply to the reporting of prescribed details

The details are to be determined in accordance with the requirements of any relevant accounting standards.

If an expression used in the table, or in subregulation (2) or (3), is defined in a relevant accounting standard, the expression has the meaning given by the standard.

In this Part, unless the contrary intention appears:

accepted, in relation to a proposal to make a restructuring plan, has the meaning given by subregulation 5.3B.25(1).

admissible debt or claim, in relation to a company under restructuring or a company’s restructuring plan, means a debt or claim that would be admissible to proof against the company under subsection 553(1) of the Act if:

the company were wound up; and

the relevant date were:

if the company is under restructuring—the beginning of the restructuring; and

if the company has made a restructuring plan—the beginning of the restructuring that ended when the plan was made;

but does not include:

the entitlements of an employee of the company; or

a debt or claim that would be admissible to proof under subsection 553(1A) of the Act.

Note: Employee entitlements are defined in subsections 596AA(2) and (3) of the Act and include superannuation contributions payable by the company.

affected creditor means:

in relation to a proposal to vary or terminate a company’s restructuring plan—a creditor of the company who is a party (as creditor) to the plan; or

in relation to a proposal by a company to make a restructuring plan—a person who would be a party to the restructuring plan if it were made.

excluded creditor means a creditor of the company who: is the restructuring practitioner for the company; or was, at the time the restructuring began, a related creditor of the company; or was, on becoming an affected creditor, a related entity of the restructuring practitioner. make, in relation to a restructuring plan, has the meaning given by regulation 5.3B.26. proposal period, in relation to a company under restructuring, has the meaning given by regulation 5.3B.17. propose, in relation to a restructuring plan, has the meaning given by regulation 5.3B.14.

is the restructuring practitioner for the company; or

was, at the time the restructuring began, a related creditor of the company; or

was, on becoming an affected creditor, a related entity of the restructuring practitioner.

make, in relation to a restructuring plan, has the meaning given by regulation 5.3B.26.

proposal period, in relation to a company under restructuring, has the meaning given by regulation 5.3B.17.

propose, in relation to a restructuring plan, has the meaning given by regulation 5.3B.14.

related creditor of a company means a person who is a related entity, and a creditor, of the company.

restructuring proposal statement means a statement made by a company under regulation 5.3B.16.

For the purposes of paragraph 453A(b) of the Act, the restructuring of a company ends if:

the company makes a declaration under subregulation (2); or

the company fails to propose a restructuring plan within the proposal period; or

the company’s proposal to make a restructuring plan lapses under regulation 5.3B.20; or

the restructuring practitioner for the company terminates the restructuring under section 453J of the Act; or

the Court orders that the restructuring of the company is to end; or

an administrator of the company is appointed under section 436A, 436B or 436C of the Act; or

a liquidator or provisional liquidator of the company is appointed; or

the company makes a restructuring plan.

The directors of a company under restructuring:

may make a declaration in writing that the restructuring of the company is to end on a specified day for any reason; and

must give a copy of the declaration to:

the company’s restructuring practitioner; and

the company’s creditors;

before the day specified in the declaration.

For the purposes of paragraph 453C(1)(a) of the Act, the test for eligibility is that on the day the restructuring begins the total liabilities of the company to pay any admissible debts and claims must not exceed $1 million.

For the purposes of paragraph 453C(1)(b) of the Act, a period of 7 years is prescribed.

For the purposes of paragraph 453C(1)(c) of the Act, a period of 7 years is prescribed.

For the purposes of paragraph 453C(2)(b) of the Act, a prescribed circumstance is that:

the other company is a related body corporate of the company in relation to which the eligibility criteria are to be met; and

the other company is, or has been:

under restructuring; or

the subject of a simplified liquidation process; and

if subparagraph (b)(i) applies—the restructuring practitioner for the other company was appointed no more than 20 business days before the day on which the restructuring of the company in relation to which the eligibility criteria are to be met began; and

if subparagraph (b)(ii) applies—the other company began to follow the simplified liquidation process no more than 20 business days before the day on which the restructuring of the company in relation to which the eligibility criteria are to be met began.

For the purposes of subsection 453L(4) of the Act, this regulation prescribes the circumstances in which entering into a transaction or dealing by a company is to not be treated as in the ordinary course of the company’s business.

The circumstances are as follows:

the transaction or dealing is for the purposes of satisfying an admissible debt or claim;

the transaction or dealing relates to the transfer or sale of the whole or a part of the business;

the transaction or dealing relates to the payment of a dividend.

This regulation applies if the restructuring practitioner for a company under restructuring consents to a transaction or dealing under paragraph 453L(2)(b) of the Act.

The consent must be given:

in writing; or

if the restructuring practitioner is satisfied that the delay caused by giving a written consent would not be in the best interests of the company’s creditors as a whole—orally.

If the consent is given in writing, the written consent must specify any conditions imposed on the consent.

If the consent is given orally, the restructuring practitioner must, within 2 business days after the day on which the consent is given:

make a written record of the consent and any conditions imposed on the consent; and

provide a copy of the written record to the company.

The restructuring practitioner must keep a record of the consent for 5 years after the day on which the consent is given.

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

For the purposes of paragraph 453J(3)(b) of the Act, the following information is prescribed:

the following details about the company:

the name of the company;

any trading name of the company;

the ACN of the company;

the address of the company’s registered office;

any website maintained by or on behalf of the company;

the company’s email address (if any);

the following details about the restructuring practitioner:

the restructuring practitioner’s name;

the address and telephone number of the principal place where the restructuring practitioner practises as a registered liquidator;

if the restructuring practitioner practises as a registered liquidator as a member of a firm or under a name or style other than the person’s own name—the name of that firm or the name or style under which the person practises;

the Registered Liquidator Number for the restructuring practitioner as specified on the Register of Liquidators;

the day on which the restructuring of the company began;

the day on which the notice is given to the company;

the reason for terminating the restructuring of the company;

the signature of the restructuring practitioner;

any other information that the restructuring practitioner considers appropriate.

Subdivision B—Restructuring practitioner for company under restructuring

This Subdivision is made for the purposes of subsection 453E(2) of the Act.

The restructuring practitioner for a company under restructuring has the power to investigate the company’s business, property, affairs and financial circumstances for the purposes of:

preparing a declaration under regulation 5.3B.18; or

deciding whether to terminate the restructuring of the company; or

resolving a disagreement under regulation 5.3B.22; or

performing or exercising any other function, duty or power as restructuring practitioner for the company.

(1) This regulation applies in relation to a restructuring practitioner for a company (the replacement practitioner) who is appointed under subsection 456E(1) of the Act.

Replacement practitioner must resolve existing creditor disputes

If:

(a) before the appointment, a notice was given under subregulation 5.3B.22(2) to the restructuring practitioner for the company (the former practitioner) setting out a creditor’s disagreement with the schedule of debts and claims included with the company’s restructuring proposal statement; and

at the time of the appointment, the former practitioner has not given notice under subregulation 5.3B.22(6) or (7) in relation to the disagreement;

the replacement practitioner must give the notice under subregulation 5.3B.22(6) or (7), as the case requires, as soon as practicable after the appointment.

Replacement practitioner must lodge outstanding notices etc.

If:

before the appointment, a restructuring practitioner for the company was required to do a thing under Subdivision B or C of Division 5; and

at the time of the appointment, the thing has not been done;

the replacement practitioner must do the thing within 2 business days after the day on which the replacement practitioner is appointed.

A person who is or has been the restructuring practitioner for a company under restructuring is not subject to any liability to any person in respect of anything done, or omitted to be done, in good faith and without negligence in the exercise or performance, or the purported exercise or performance, of powers, functions or duties under the Act or these regulations relating to the restructuring of the company.

Subdivision C—Stay on enforcing rights merely because the company is under restructuring etc.

For the purposes of subparagraph 454N(5)(c)(i) of the Act, each of the kinds of contracts, agreements or arrangements referred to in subregulation 5.3A.50(2) is prescribed.

Unless otherwise specified, this Division is made under section 455B of the Act.

Subdivision B—Proposing a restructuring plan

(1) A company under restructuring proposes a restructuring plan if:

the company prepares:

a restructuring plan that complies with the requirements in regulation 5.3B.15; and

a restructuring proposal statement that complies with the requirements in regulation 5.3B.16; and

the company executes the restructuring plan during the proposal period; and

the company’s restructuring practitioner prepares and signs a declaration in accordance with regulation 5.3B.18; and

the restructuring practitioner gives a copy of the restructuring plan, restructuring proposal statement and declaration in accordance with subregulation 5.3B.21(1); and

immediately before the restructuring practitioner gives the copies in accordance with subregulation 5.3B.21(1), regulation 5.3B.24 is satisfied in relation to the company.

For the purposes of subsection 455A(3) of the Act, the company is taken to have proposed the restructuring plan on the day the company’s restructuring practitioner does the things mentioned in paragraph (1)(d).

A company under restructuring must prepare a restructuring plan that complies with the requirements of this regulation.

The restructuring plan must:

be in the form approved under regulation 5.3B.65 (if any); and

identify the company’s property that is to be dealt with; and

specify how the property is to be dealt with; and

provide for the remuneration of the restructuring practitioner for the plan; and

specify the date on which the restructuring plan was executed.

The restructuring plan may:

authorise the restructuring practitioner for the plan to deal with the identified property in the way specified in the plan; and

provide that, when performing a function or duty, or exercising a power, as restructuring practitioner for the plan, the restructuring practitioner is taken to act as agent for and on behalf of the company; and

provide for any matter relating to the company’s financial affairs; and

be expressed to be conditional on the occurrence of a specified event within a specified period of no longer than 10 business days after the day on which the proposal to make the restructuring plan is accepted.

The restructuring plan must not:

provide for the transfer of property (other than money) to a creditor; or

provide for the company to make payments under the plan, in respect of an admissible debt or claim, after 3 years beginning on the day the plan is made.

A restructuring plan must be accompanied by a restructuring proposal statement.

The restructuring proposal statement must:

include a schedule of debts and claims; and

be in the form approved under regulation 5.3B.65 (if any); and

contain such information as the form requires.

(1) The proposal period, in relation to a company that is under restructuring, is the period of 20 business days beginning on the day the restructuring begins.

Restructuring practitioner may extend proposal period

The company’s restructuring practitioner may, on application by the company, extend the proposal period by no more than 10 business days if the restructuring practitioner is satisfied on reasonable grounds that requiring the company to give a restructuring plan within the proposal period would not be reasonable in the circumstances.

The restructuring practitioner may not extend the proposal period more than once under subregulation (2).

Court may extend proposal period

The Court may, on application by the company, order an extension of the proposal period.

Notification of extension

Within 2 business days after the day on which the proposal period is extended under subregulation (2) or (4), the restructuring practitioner must:

lodge with ASIC notice of the extension:

in the prescribed form (if any); and

in accordance with subregulation 5.6.75(4); and

give a copy of the notice to as many of the company’s creditors as reasonably practicable.

As soon as practicable after a company executes a restructuring plan, the company’s restructuring practitioner must make a declaration in accordance with this regulation.

The declaration must:

if the restructuring practitioner believes on reasonable grounds that:

the eligibility criteria for restructuring are met in relation to the company; and

if the restructuring plan is made, the company is likely to be able to discharge the obligations created by the plan as and when they become due and payable;

state that; and

if the restructuring practitioner believes on reasonable grounds that all information required to be set out in the company’s restructuring proposal statement has been set out in that statement—state that; and

if the restructuring practitioner does not believe on reasonable grounds a matter mentioned in paragraph (a) or (b)—identify the matter in relation to which a belief on reasonable grounds could not be formed and set out the reasons for that conclusion; and

if, at the time a person became an affected creditor, the person was a related entity of the restructuring practitioner—specify the name of the affected creditor and the nature of the relationship between the affected creditor and the restructuring practitioner.

Note: A declaration must not be false or misleading in a material particular, or omit anything that would render it materially false or misleading: see section 1308 of the Act.

The declaration must be signed by the restructuring practitioner.

Offence

The restructuring practitioner for a company commits an offence if:

the restructuring practitioner prepares a declaration under this regulation; and

the restructuring practitioner does not:

make reasonable inquiries into the company’s business, property, affairs and financial circumstances; or

take reasonable steps to verify the company’s business, property, affairs and financial circumstances;

for the purpose of assessing the accuracy and completeness of the information provided by the company in the restructuring plan and restructuring proposal statement.

Penalty: 50 penalty units.

An offence based on subregulation (4) is an offence of strict liability.

The restructuring practitioner for a company under restructuring commits an offence if:

at any time before the restructuring practitioner prepares a declaration under regulation 5.3B.18 in relation to the company’s restructuring plan:

the restructuring practitioner becomes aware that the information in the plan, or in the restructuring proposal statement that accompanies the plan, is incomplete or inaccurate; and

the restructuring practitioner has reasonable grounds to believe that, if the plan is made, the matter to which the incompleteness or inaccuracy relates is likely to affect the company’s ability to meet its obligations under the plan; and

the restructuring practitioner does not, as soon as practicable after becoming so aware:

notify the company of the incompleteness or inaccuracy; and

provide an opportunity for the company to address the incompleteness or inaccuracy.

Penalty: 50 penalty units.

An offence based on subregulation (1) is an offence of strict liability.

A company’s proposal to make a restructuring plan lapses if:

the restructuring plan is not accepted in accordance with subregulation 5.3B.25(1); or

the company’s restructuring practitioner cancels the proposal to make the plan in accordance with subregulation (2).

The restructuring practitioner for a company may cancel the company’s proposal to make a restructuring plan if, before the restructuring plan is made, the restructuring practitioner:

becomes aware that the information in the plan is incomplete or inaccurate, and has reasonable grounds to believe that, if the plan is made, the matter to which the incompleteness or inaccuracy relates is likely to affect the company’s ability to meet its obligations under the plan; or

becomes aware that one or more affected creditors were not disclosed in the company’s restructuring proposal statement; or

becomes aware that the company’s restructuring proposal statement was deficient because it omitted a material particular or because it was incorrect in a material particular; or

becomes aware of a material change in the company’s circumstances that:

was not foreshadowed in the company’s restructuring proposal statement; and

in the opinion of the restructuring practitioner, is capable of affecting an affected creditor’s decision whether or not to accept the restructuring plan.

As soon as practicable after a company executes a restructuring plan, the restructuring practitioner for the company must do the following:

give to as many of the company’s affected creditors as reasonably practicable a copy of:

the company’s restructuring plan; and

the restructuring plan standard terms; and

the company’s restructuring proposal statement; and

the declaration prepared by the restructuring practitioner under regulation 5.3B.18;

ask each affected creditor to:

give a written statement setting out whether or not the restructuring plan should be accepted; and

if the creditor agrees with the company’s assessment of the amount of the creditor’s admissible debts or claims—verify the creditor’s admissible debts or claims as set out in the schedule of debts and claims included with the restructuring proposal statement; and

if the creditor disagrees with the company’s assessment of the amount of the creditor’s admissible debts or claims—notify the restructuring practitioner in accordance with regulation 5.3B.22;

inform each affected creditor of the person to whom the statement should be given and of the need to give the statement before the end of the acceptance period.

Paragraphs (1)(b) and (c) do not apply in relation to an excluded creditor.

Definitions

In this regulation:

acceptance period means:

the period of 15 business days beginning on the day the company’s restructuring practitioner gives documents in accordance with subregulation (1); or

if creditors are given a notice under paragraph 5.3B.22(7)(d)—the longer of:

the period of 15 business days beginning on the day the company’s restructuring practitioner gives documents in accordance with subregulation (1) of this regulation; and

the period beginning on the day the company’s restructuring practitioner gives documents in accordance with subregulation (1) of this regulation and ending on the last day of the period of 5 business days after the day on which the notice under paragraph 5.3B.22(7)(d) is given; or

such other period as the Court orders under regulation 5.3B.60.

restructuring plan standard terms means the terms specified in subregulation 5.3B.27(1).

This regulation applies in relation to a person if:

the person is a creditor of a company that is proposing to make a restructuring plan; and

the plan has not been made; and

the person disagrees with the schedule of debts and claims included with the company’s restructuring proposal statement because:

the person’s admissible debts or claims are not specified; or

the company’s assessment of the person’s admissible debts or claims is incorrect; or

the person is incorrectly specified as an excluded creditor.

Creditor may notify restructuring practitioner of disagreement

The person may give written notice of the disagreement to the company’s restructuring practitioner.

The notice:

may be given:

if the person received a copy of the plan—within 5 business days after the day on which the person receives the plan; or

if the person otherwise became aware of the plan—within 5 business days after the day on which the person becomes so aware; or

after the period specified in subparagraph (i) or (ii), if the notice includes a statement setting out the person’s reasons for not giving the notice within that period; and

if the disagreement relates to the person’s admissible debts or claims:

must include detailed particulars of the debt or claim sought to be proved; and

in the case of a debt, must include a statement of account; and

must specify the vouchers (if any) by which the statement can be substantiated; and

if the disagreement relates to the person’s status as an excluded creditor—must include detail sufficient to resolve the disagreement.

The restructuring practitioner may, after receiving the notice, request that the person or the directors of the company:

give the restructuring practitioner information about the company’s business, property, affairs and financial circumstances; and

verify the information by statutory declaration.

Restructuring practitioner may refuse to consider disagreement

If the notice is given after the period specified in subparagraph (3)(a)(i) or (ii), the restructuring practitioner may refuse to consider the disagreement if the restructuring practitioner is satisfied that the person did not take all reasonable steps to give notice within that period.

If the restructuring practitioner refuses to consider the disagreement:

the restructuring practitioner is taken to have recommended that the schedule of debts and claims not be varied; and

the restructuring practitioner must give written notice to the company and the person setting out the restructuring practitioner’s reasons for the refusal; and

subregulation (7) does not apply.

Restructuring practitioner must resolve disagreement as soon as practicable

If:

a person gives notice under subregulation (2) of a disagreement to the restructuring practitioner for a company; and

the restructuring practitioner has not refused to consider the disagreement under subregulation (5);

the restructuring practitioner must:

give written notice to the company and the person:

setting out the restructuring practitioner’s recommendations for resolving the disagreement; and

giving reasons for the recommendations; and

if the restructuring practitioner recommends that the schedule of debts and claims be varied and is of the opinion that the variation is significant—give written notice to the company and as many of the company’s creditors as reasonably practicable:

stating that fact; and

outlining the creditors’ rights under regulation 5.3B.23.

If the restructuring practitioner recommends that the schedule of debts and claims be varied, the company must vary the schedule in accordance with the recommendation as soon as practicable.

This regulation applies if:

a company proposes to make a restructuring plan; and

an affected creditor of the company gave a statement under paragraph 5.3B.21(1)(b) in relation to the plan.

At any time before the end of the acceptance period, the creditor may:

withdraw the statement; and

give a new statement under paragraph 5.3B.21(1)(b) in relation to the plan.

A statement may be withdrawn, and a new statement may be given, more than once before the end of the acceptance period.

Definitions

In this regulation:

acceptance period has the same meaning as in subregulation 5.3B.21(3).

This regulation is satisfied in relation to a company under restructuring if:

the company has:

paid the entitlements of its employees that are payable; and

(ii) given returns, notices, statements, applications or other documents as required by taxation laws (within the meaning of the Income Tax Assessment Act 1997); or

the company is substantially complying with the matter concerned.

Note: Employee entitlements are defined in subsections 596AA(2) and (3) of the Act and include superannuation contributions payable by the company.

Subdivision C—Accepting a proposal for a restructuring plan

When restructuring plan is accepted

(1) A company’s restructuring plan is accepted if, at the end of the last day of the acceptance period, the majority in value of those creditors from whom the restructuring practitioner for the plan has received a statement under paragraph 5.3B.21(1)(b) stated that the restructuring plan should be accepted.

For the purposes of subregulation (1):

the value of an affected creditor is to be worked out:

by reference to the value of the creditor’s admissible debts or claims that are known at the time the restructuring began; or

if a person is an affected creditor because the person purchased another creditor’s admissible debts or claims—by reference to the value of the purchase price; and

where there have been mutual credits, mutual debts or other mutual dealings between the company and an affected creditor:

an account is to be taken of what is due from the one party to the other in respect of those mutual dealings; and

the sum due from the one party is to be set off against any sum due from the other party; and

the value of the affected creditor is to be worked out only by reference to the balance of the account; and

disregard an affected creditor who is an excluded creditor.

Note: For the purposes of subparagraph (a)(ii), the purchase price would normally be the price stated in the contract for the purchase of the admissible debt or claim. However, if the amount paid by the person is different from the price stated in the contract, then the purchase price would be the amount that was actually paid.

Offence

A person commits an offence if:

the person gives, or agrees or offers to give, to an affected creditor any valuable consideration; and

the person does so with the intention of securing the affected creditor’s acceptance or non-acceptance of the restructuring plan.

Penalty: 50 penalty units.

Definitions

In this regulation:

acceptance period has the same meaning as in subregulation 5.3B.21(3).

(1) If a company’s proposal to make a restructuring plan is accepted in accordance with regulation 5.3B.25, the company is taken to have made the restructuring plan.

(2) The restructuring plan is taken to have been made:

if the plan is expressed to be conditional on the occurrence of a specified event within a specified period and the event occurs within that period—on the day after the end of that period; and

otherwise—on the day after the end of the acceptance period.

A restructuring plan that has been made has the same force and validity as if it were a deed executed by each of the parties to the plan.

Definitions

In this regulation:

acceptance period has the same meaning as in subregulation 5.3B.21(3).

A restructuring plan made by a company is taken to include all of the following terms:

all admissible debts and claims rank equally;

if the total amount paid by the company under the plan in respect of those debts or claims is insufficient to meet those debts or claims in full, those debts or claims will be paid proportionately;

a creditor is not entitled to receive, in respect of an admissible debt or claim, more than the amount of the debt or claim;

the amount of an admissible debt or claim will be ascertained as at the time immediately before the restructuring began;

if a creditor is a secured creditor:

if the creditor does not realise the creditor’s security interest while the plan is in force, the creditor is taken, for the purposes of working out the amount payable to the creditor under the plan, to be a creditor only to the extent (if any) by which the amount of the creditor’s admissible debt or claim exceeds the value of the creditor’s security interest; and

if the creditor realises the creditor’s security interest while the plan is in force, the creditor is taken, for the purposes of working out the amount payable to the creditor under the plan, to be a creditor only to the extent of any balance due to the creditor after deducting the net amount realised.

A restructuring plan is void to the extent that it is inconsistent with any of the matters set out in subregulation (1).

The parties to a restructuring plan are:

the company to which the plan relates; and

any person who has an admissible debt or claim in relation to the plan.

This regulation applies on and after the day on which a restructuring plan is made in relation to a company.

The plan is binding on:

subject to subregulations (3) and (4)—a creditor of the company to the extent that the creditor has an admissible debt or claim in relation to the plan; and

the company; and

the company’s officers and members; and

the restructuring practitioner for the plan.

If a creditor of the company is a secured creditor, the plan is binding on the creditor:

if the value of the creditor’s security interest is less than the value of the creditor’s admissible debts or claims—only to the extent of the difference between the values; and

if the value of the creditor’s security interest is equal to or more than the value of the creditor’s admissible debts or claims—only to the extent that the creditor consents to be bound by the plan.

The fact that a restructuring plan has been made does not prevent a secured creditor from realising or otherwise dealing with the security interest, unless:

the secured creditor accepted the proposal to make the plan and the plan prevents the secured creditor from doing so; or

the Court so orders under subregulation 5.3B.64(2).

The fact that a restructuring plan has been made does not affect a right that an owner or lessor of property has in relation to that property, unless:

the owner or lessor accepted the proposal to make the plan and the plan affects that right; or

the Court so orders under subregulation 5.3B.64(4).

Subregulation (5) does not apply in relation to an owner or lessor of PPSA retention of title property of the company.

Note: Subregulation (3) applies in relation to an owner or lessor of PPSA retention of title property of the company. Such an owner or lessor is a secured creditor of the company (see PPSA retention of title property)).section 51F of the Act (meaning of

Until a restructuring plan terminates, this regulation applies to a person bound by the plan.

A person bound by the plan cannot:

make an application for an order to wind up the company on the basis of an admissible debt or claim; or

proceed with such an application made before the plan became binding on the person.

A person bound by the plan cannot:

begin or proceed with a proceeding against the company or in relation to any of its property to recover an admissible debt or claim; or

begin or proceed with an enforcement process in relation to property of the company to recover an admissible debt or claim;

except:

with the leave of the Court; and

in accordance with such terms (if any) as the Court imposes.

A company’s restructuring plan terminates:

on the day on which all of the following conditions are satisfied:

the company’s obligations under the plan have been fulfilled;

the obligations of any other party to the plan have been fulfilled;

all admissible debts or claims have been dealt with in accordance with the plan; or

if the Court makes an order under regulation 5.3B.63 terminating the plan—on the day the Court determines and specifies in the order; or

if both of the following conditions are satisfied:

the plan is expressed to be subject to the occurrence of a specified event within a specified period of no longer than 10 business days after the day on which the plan is made;

the event does not occur within that period;

on the next business day after the end of that period; or

if both of the following conditions are satisfied:

there has been a contravention of the plan by a person bound by the plan;

the contravention has not been rectified within the period of 30 business days beginning on the day the contravention occurred;

on the next business day after the end of that period; or

on the day on which an administrator of the company is appointed under section 436A, 436B or 436C of the Act; or

on the day on which a liquidator or provisional liquidator of the company is appointed;

whichever happens first.

If a company’s restructuring plan terminates because of the happening of the event mentioned in paragraph (1)(a):

the company is entitled to any property that was subject to the plan but that was not required by the plan to be distributed to creditors; and

the company is released from all admissible debts or claims.

If a company’s restructuring plan terminates because of the happening of an event mentioned in paragraph (1)(b), (c), (d), (e) or (f), any admissible debt or claim that has not been dealt with in accordance with the plan is taken to be due and payable on the business day after the day on which the termination occurs.

The termination or avoidance, in whole or in part, of a restructuring plan does not affect the validity of anything that was done in good faith under the plan by a person before the person had notice of the termination or avoidance.

Subdivision D—Restructuring practitioner for a restructuring plan

If a company under restructuring makes a restructuring plan, the company’s restructuring practitioner is to be the restructuring practitioner for the restructuring plan unless the company, by resolution of the board, appoints someone else to be the restructuring practitioner for the plan.

Where the restructuring practitioner for a company’s restructuring plan:

dies; or

becomes prohibited from acting as restructuring practitioner for the plan; or

resigns by notice in writing given to the company;

the appointer may appoint someone else as restructuring practitioner for the restructuring plan.

In subregulation (1):

appointer, in relation to the restructuring practitioner for a company’s restructuring plan, means:

if the restructuring practitioner was appointed by the Court under Division 90 of Schedule 2 to the Act (review of the external administration of a company) or subregulation (4) of this regulation—the Court; or

the company.

An appointment under subregulation (1) by the company must be made by resolution of the board.

Where a company has made a restructuring plan, but for some reason no restructuring practitioner for the plan is acting, the Court may appoint a person as restructuring practitioner for the plan on the application of ASIC or of an officer, member or creditor of the company.

This regulation applies in relation to a person if:

the person is the restructuring practitioner for a company’s restructuring plan; and

either:

the person was not the company’s restructuring practitioner immediately before the person was appointed as the restructuring practitioner for the plan; or

the person was appointed as the restructuring practitioner for the plan under subregulation 5.3B.34(1) otherwise than by the Court.

As soon as practicable after being appointed, the person must make a declaration of relevant relationships.

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

The person must give a copy of the declaration under subregulation (2) to as many of the company’s creditors as reasonably practicable.

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

As soon as practicable after making a declaration under subregulation (2), the person must lodge a copy of the declaration with ASIC.

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

In a prosecution for an offence constituted by a failure to include a particular matter in a declaration under this regulation, it is a defence if the defendant proves that:

the defendant made reasonable enquiries; and

after making these enquiries, the defendant had no reasonable grounds for believing that the matter should have been included in the declaration.

If:

at a particular time, the restructuring practitioner for a company’s restructuring plan makes a declaration of relevant relationships under section 453D of the Act or regulation 5.3B.35; and

at a later time:

the declaration has become out-of-date; or

the restructuring practitioner becomes aware of an error in the declaration;

the restructuring practitioner must, as soon as practicable, make a replacement declaration of relevant relationships.

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

The restructuring practitioner must give a copy of the replacement declaration under subregulation (1) to as many of the company’s creditors as reasonably practicable.

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

As soon as practicable after making a replacement declaration under subregulation (1), the person must lodge a copy of the replacement declaration with ASIC.

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

In a prosecution for an offence constituted by a failure to include a particular matter in a declaration under this regulation, it is a defence if the defendant proves that:

the defendant made reasonable enquiries; and

after making these enquiries, the defendant had no reasonable grounds for believing that the matter should have been included in the declaration.

The functions of the restructuring practitioner for a company’s restructuring plan are:

to receive money from, and hold money on trust for, the company; and

to pay the money to creditors in accordance with the plan; and

if requested to do so by the company’s directors:

to realise the property of the company that is available to pay creditors in accordance with the plan; and

to distribute the proceeds of the realisation of the property among the creditors in accordance with the plan; and

to answer questions about the performance or exercise of any of the restructuring practitioner’s functions and powers as restructuring practitioner for the plan; and

to do anything that is incidental to the performance or exercise of those functions and powers; and

to do anything else that is necessary or convenient for the purpose of administering the plan.

(1) This regulation applies in relation to a restructuring practitioner for a restructuring plan (the replacement practitioner) who is appointed under subregulation 5.3B.34(1).

If:

before the appointment, a restructuring practitioner for the plan was required to do a thing under:

Division 4; or

Subdivision B or C of Division 5; and

at the time of the appointment, the thing has not been done;

the replacement practitioner must do the thing within:

2 business days after the day on which the replacement practitioner is appointed; or

if the requirement arose because the restructuring practitioner was given notice or became aware of a thing—within 2 business days after the day on which the replacement practitioner is given the notice or becomes so aware.

The restructuring practitioner for a company’s restructuring plan must not dispose of:

property of the company that is subject to a security interest; or

property (other than PPSA retention of title property) that is used or occupied by, or is in the possession of, the company but of which someone else is the owner or lessor.

Note: PPSA retention of title property is subject to a PPSA security interest, and so is covered by paragraph (a) (see definition of PPSA retention of title property in section 51F of the Act).

Subregulation (1) does not prevent a disposal:

in the ordinary course of the company’s business; or

with the written consent of the secured party, owner or lessor, as the case may be; or

with the leave of the Court.

The Court may only give leave under paragraph (2)(c) if satisfied that arrangements have been made to adequately protect the interests of the secured party, owner or lessor, as the case may be.

If the restructuring practitioner proposes to dispose of property under paragraph (2)(a), the Court may, by order, direct the restructuring practitioner not to carry out that proposal.

The Court may only make an order under subregulation (4) on the application of:

if paragraph (1)(a) applies—the secured party; or

if paragraph (1)(b) applies—the owner or lessor, as the case may be.

The Court may only make an order under subregulation (4) if it is not satisfied that arrangements have been made to protect adequately the interests of the applicant for the order.

If:

a company has made a restructuring plan that has not terminated; and

property of the company is subject to a security interest; and

the restructuring practitioner disposes of the property;

the disposal extinguishes the security interest.

For the purposes of paragraph (2)(a), if:

property is used or occupied by, or is in the possession of, a company; and

another person is the owner of the property; and

either:

the property is PPSA retention of title property; or

the property is subject to a retention of title clause under a contract; and

the owner demands the return of the property;

a disposal of the property that occurs after the demand is made does not mean that the disposal is not in the ordinary course of the company’s business.

A person who is or has been the restructuring practitioner for a company’s restructuring plan is not subject to any liability to any person in respect of anything done, or omitted to be done, in good faith and without negligence in the exercise or performance, or the purported exercise or performance, of powers, functions or duties under the Act or these regulations relating to the plan.

A person who is or has been the restructuring practitioner for a company’s restructuring plan is entitled to be indemnified out of the company’s property (other than any PPSA retention of title property subject to a PPSA security interest that is perfected within the meaning of the Personal Property Securities Act 2009) for:

any debts or liabilities incurred, or damages or losses sustained, in good faith and without negligence, by the restructuring practitioner:

in the performance or purported performance of the restructuring practitioner’s functions or duties; or

in the exercise or purported exercise of the restructuring practitioner’s powers; and

the remuneration to which the restructuring practitioner is entitled under Insolvency Practice Rules made under Subdivision DA of Division 60 of Schedule 2 to the Act.

General rule

Subject to section 556 of the Act, a right of indemnity under regulation 5.3B.43 has priority over:

all the company’s unsecured debts; and

any debts of the company secured by a PPSA security interest in property of the company if, when the restructuring of the company begins, the security interest is vested in the company because of the operation of any of the following provisions:

(i) Personal Property Securities Act 2009 (property subject to unperfected security interests);section 267 or 267A of the

section 588FL of the Act (collateral not registered within time); and

subject otherwise to this section—debts of the company secured by a circulating security interest in property of the company.

Debts secured by circulating security interests—receiver appointed before the beginning of restructuring etc.

A right of indemnity under regulation 5.3B.43 does not have priority over debts of the company that are secured by a circulating security interest in property of the company, except so far as the secured party agrees, if:

before the making of the restructuring plan, the secured party:

appointed a receiver of property of the company under a power contained in an instrument relating to the security interest; or

obtained an order for the appointment of a receiver of property of the company for the purpose of enforcing the security interest; or

entered into possession, or assumed control, of property of the company for that purpose; or

appointed a person so as to enter into possession or assume control (whether as agent for the secured party or for the company); and

the receiver or person is still in office, or the secured party is still in possession or control of the property.

Debts secured by circulating security interests—receiver appointed after restructuring plan made etc.

Subregulation (4) applies if:

debts of the company are secured by a circulating security interest in property of the company; and

after the company’s restructuring plan is made, the secured party, consistently with Part 5.3B of the Act:

appoints a receiver of property of the company under a power contained in an instrument relating to the security interest; or

obtains an order for the appointment of a receiver of property of the company for the purpose of enforcing the security interest; or

enters into possession, or assumes control, of property of the company for that purpose; or

appoints a person to enter into possession or assume control (whether as agent for the secured party or for the company).

A right of indemnity of the restructuring practitioner under regulation 5.3B.43 has priority over those debts only in so far as it is a right of indemnity for debts incurred, or remuneration accruing, before written notice of the appointment, or of the entering into possession or assuming of control, as the case may be, was given to the restructuring practitioner.

Debts secured by circulating security interests—priority over right of indemnity in relation to repayment of money borrowed etc.

A right of indemnity under regulation 5.3B.43 does not have priority over debts of the company that are secured by a circulating security interest in property of the company, except so far as the secured party consents in writing, to the extent that the right of indemnity relates to debts incurred for:

the repayment of money borrowed; or

interest in respect of money borrowed; or

borrowing costs.

To secure a right of indemnity under regulation 5.3B.43, the restructuring practitioner has a lien on the company’s property.

A lien under subregulation (1) has priority over another security interest only in so far as the right of indemnity under regulation 5.3B.43 has priority over debts secured by the other security interest.

This Division is made for the purposes of subsection 456G(1) of the Act.

The directors of a company that has made a restructuring plan that has not terminated must, within 2 business days after the day on which the directors become aware of the happening of an event mentioned in subregulation (4), give written notice of the event to the restructuring practitioner for the plan.

The restructuring practitioner must, within 2 business days after the day on which the restructuring practitioner receives the notice:

lodge with ASIC notice in the prescribed form (if any) of the happening of the event; and

give a copy of the notice to as many of the company’s creditors as reasonably practicable.

If:

(a) a restructuring practitioner for the plan (the replacement practitioner) is appointed under subregulation 5.3B.34(1); and

at the time of the appointment, notice of the happening of the event has not been lodged or given in accordance with subregulation (2);

the directors must give written notice of the event to the replacement practitioner within 2 business days after the day on which the replacement practitioner is appointed.

The events that must be notified are as follows:

an administrator of the company is appointed under section 436A, 436B or 436C of the Act;

a liquidator or provisional liquidator of the company is appointed.

This Division is made for the purposes of section 457A of the Act.

Subdivision B—Information, reports, documents etc. during restructuring

Within 5 business days after the day on which the restructuring of a company begins or such longer period as the company’s restructuring practitioner allows, the directors of the company must give to the restructuring practitioner a declaration in accordance with this regulation.

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

The declaration must:

be in the form approved under regulation 5.3B.65 (if any); and

state whether, in the directors’ opinion, there are reasonable grounds to believe that the company has entered into a transaction that would be voidable under section 588FE of the Act if:

the company were being wound up because the company had resolved by special resolution that it be wound up voluntarily; and

the resolution had been passed on the day on which the declaration is given; and

the company were under restructuring immediately before the company passed the resolution; and

the relation-back day were the day on which the restructuring of the company began;

other than a transaction that would be an unfair preference; and

state whether, in the directors’ opinion, there are reasonable grounds to believe that the eligibility criteria for restructuring were met in relation to the company at the time the restructuring began, and set out the reasons for that opinion.

Note: A declaration must not be false or misleading in a material particular, or omit anything that would render it misleading in a material respect: see section 1308 of the Act.

The declaration must be signed by each director of the company.

Within 1 business day after the day on which a restructuring practitioner for a company is appointed, the restructuring practitioner must lodge with ASIC notice of the appointment:

in the prescribed form (if any); and

in accordance with subregulation 5.6.75(4).

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

Within 1 business day after the day on which a restructuring practitioner for a company is appointed, the restructuring practitioner must give information about the following to as many of the company’s creditors as reasonably practicable:

the fact that the restructuring practitioner has been appointed in relation to the company;

the name of the company;

any trading name of the company;

the ACN of the company;

the name and contact details of the restructuring practitioner;

the date on which the restructuring practitioner was appointed;

the restructuring process and the process of making a restructuring plan, including:

the proposal period in relation to the company; and

the amount of time in which an affected creditor may decide whether a proposed restructuring plan should be accepted; and

how an affected creditor may verify or dispute the creditor’s admissible debts or claims;

how a person may obtain further information about the restructuring process and the process of making a restructuring plan;

the right of creditors to request information, reports and documents under sections 70-40 and 70-45 of Schedule 2 to the Act.

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

Within 2 business days after the day on which the appointment of a person as restructuring practitioner for a company terminates, notice in the prescribed form (if any) of the termination must be lodged with ASIC:

if the termination is because of the death of the person—by the company; and

otherwise—by the person.

Within 2 business days after the day on which the restructuring practitioner for a company gives, in accordance with subregulation 5.3B.21(1), a copy of:

the company’s restructuring plan; and

the company’s restructuring proposal statement; and

the declaration prepared by the restructuring practitioner under regulation 5.3B.18;

the restructuring practitioner must lodge with ASIC in the prescribed form (if any):

the plan; and

the restructuring proposal statement; and

the declaration.

If the restructuring of a company ends because of the happening of an event mentioned in subregulation 5.3B.02(1), the person who was the restructuring practitioner for the company immediately before the restructuring ended must, within 2 business days after the day on which the event happens:

lodge with ASIC notice in the prescribed form (if any) of:

the ending of the restructuring; and

the reason for the ending; and

give a copy of the notice to as many of the company’s creditors as reasonably practicable.

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

Subdivision C—Information, reports, documents etc. once restructuring plan is made

Within 2 business days after the day on which a restructuring practitioner for a restructuring plan is appointed, the restructuring practitioner must lodge with ASIC notice of the appointment:

in the prescribed form (if any); and

in accordance with subregulation 5.6.75(4).

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

If a company makes a restructuring plan, the restructuring practitioner for the plan must, within 2 business days after the day on which the plan is made:

give to as many of the company’s creditors as reasonably practicable a written notice:

stating that the plan has been made; and

specifying the day on which the plan was made; and

lodge with ASIC notice in the prescribed form (if any) of the making of the plan, including information about:

the total value of the debts and claims set out in the schedule of debts and claims included with the company’s restructuring proposal statement; and

the number of affected creditors to whom the restructuring practitioner gave a copy of the documents mentioned in paragraph 5.3B.21(1)(a); and

the proportion in value of affected creditors that gave, before the end of the acceptance period, a statement under paragraph 5.3B.21(1)(b) that the plan should be accepted.

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

Director to notify restructuring practitioner

If a director of a company that has made a restructuring plan becomes aware that:

there has been a contravention of the plan by a person bound by the plan (who may be the director); or

there is likely to be a contravention of the plan by a person bound by the plan (who may be the director);

the director must, within 2 business days after the day on which the director becomes aware of the contravention or likely contravention, give written notice of the contravention or likely contravention to the restructuring practitioner for the plan.

Restructuring practitioner to notify company’s creditors

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

If the restructuring practitioner for a restructuring plan receives notice under subregulation (1), or otherwise becomes aware, that:

there has been a contravention of the plan by a person bound by the plan (who may be the restructuring practitioner); or

there is likely to be a contravention of the plan by a person bound by the plan (who may be the restructuring practitioner);

the restructuring practitioner must, within 2 business days after the day on which the restructuring practitioner receives the notice or becomes so aware:

lodge with ASIC notice in the prescribed form (if any) of the contravention or likely contravention; and

give a copy of the notice to as many of the company’s creditors as reasonably practicable.

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

If a company’s restructuring plan terminates because of the happening of the event mentioned in paragraph 5.3B.31(1)(a):

(a) the directors of the company must, within 2 business days after the day on which the directors become aware of the happening of the event, give written notice of the termination to the person (the former practitioner) who was the restructuring practitioner for the plan immediately before the termination; and

the former practitioner must, within 2 business days after the day on which the former practitioner receives the notice:

lodge with ASIC notice in the prescribed form (if any) of the termination; and

give a copy of the notice to as many of the company’s creditors as reasonably practicable.

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

If a company’s restructuring plan terminates because of the happening of an event mentioned in paragraph 5.3B.31(1)(b), (c), (d), (e) or (f):

(a) the directors of the company must, within 2 business days after the day on which the directors become aware of the happening of the event, give written notice of the termination and the reason for the termination to the person (the former practitioner) who was the restructuring practitioner for the plan immediately before the termination; and

the former practitioner must, within 2 business days after the day on which the former practitioner receives the notice:

lodge with ASIC notice in the prescribed form (if any) of the termination and the reason for the termination; and

give a copy of the notice to as many of the company’s creditors as reasonably practicable.

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

Within 2 business days after the day on which the appointment of a person as restructuring practitioner for a company’s restructuring plan terminates, notice in the prescribed form (if any) of the termination must be lodged with ASIC:

if the termination is because of the death of the person—by the company; and

otherwise—by the person.

This Division is made for the purposes of subsection 458B(1) of the Act.

This regulation applies if:

a company proposes to make a restructuring plan; and

a person notifies the company’s restructuring practitioner under subregulation 5.3B.22(2) that the person disagrees with the schedule of debts and claims included with the company’s restructuring proposal statement; and

the restructuring practitioner:

refuses to consider the disagreement under subregulation 5.3B.22(5); or

(ii) makes, or refuses to make, a recommendation under subregulation 5.3B.22(7) to vary the schedule of debts and claims.

The Court may, on the application of the company or a creditor of the company, make one or more of the following orders:

that the restructuring practitioner consider the disagreement and make a recommendation in accordance with subregulation 5.3B.22(7);

that the schedule of debts and claims be varied as set out in the order;

that the acceptance period for the proposal to make the restructuring plan be extended.

If the Court makes an order under subregulation (2), the restructuring practitioner must, within 2 business days after the day on which the order is made:

lodge with ASIC notice in the prescribed form (if any):

setting out the terms of the order; and

outlining the creditors’ rights under regulation 5.3B.23; and

give a copy of the notice to as many of the company’s creditors as reasonably practicable.

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

A restructuring plan that has been made by a company must not be varied except in accordance with this regulation.

The Court may make an order varying a restructuring plan:

on its own initiative; or

on the application of:

the company; or

an affected creditor; or

the restructuring practitioner for the plan; or

ASIC.

Voiding of restructuring plan

The Court may make an order declaring that all or part of a company’s restructuring plan is void if the Court is satisfied that:

there are reasonable grounds to believe that the plan, or a part of the plan, was not made in accordance with, or does not comply with, the Act or these regulations; or

the restructuring practitioner for the plan has committed a breach of duty in relation to the plan; or

the restructuring practitioner for the plan has breached a condition of the restructuring practitioner’s registration as a liquidator; or

the restructuring practitioner for the plan has breached a condition imposed under section 20-35 of Schedule 2 to the Act, to the extent that the condition relates to restructuring plans.

The Court may make any other order that it thinks appropriate in relation to the declaration.

Validity of plan despite contravention

The Court may make an order declaring that all or part of a company’s restructuring plan is valid, despite a contravention of a provision of the Act or these regulations, if the Court is satisfied that:

the provision was substantially complied with; and

no injustice will result for anyone bound by the plan if the contravention is disregarded.

Applications for orders under this regulation

The Court may make an order under this regulation on the application of:

the company; or

an affected creditor; or

the company’s restructuring practitioner; or

ASIC.

However, an application for an order under this regulation must not be made if the plan has terminated because of paragraph 5.3B.31(1)(a).

The Court may make an order terminating a company’s restructuring plan if the Court is satisfied that:

information about the company’s business, property, affairs or financial circumstances that:

was false or misleading; and

can reasonably be expected to have been material to the affected creditors in deciding whether to accept the plan;

was contained in the plan or the restructuring proposal statement that accompanied the plan; or

there was an omission from the plan or statement and the omission can reasonably be expected to have been material to such creditors in so deciding; or

there has been a material contravention of the plan by a person bound by the plan; or

effect cannot be given to the plan without injustice or undue delay; or

the plan or a provision of it is, an act or omission done or made under the plan was, or an act or omission proposed to be so done or made would be contrary to the interests of the creditors of the company as a whole; or

the plan should be terminated for some other reason.

The Court may make an order under this regulation:

on its own initiative; or

on the application of:

the company; or

an affected creditor; or

the restructuring practitioner for the company or for the plan; or

ASIC.

This regulation applies where:

a company is under restructuring; or

a company makes a restructuring plan that has not terminated.

Subject to subsection 454C(3) of the Act, the Court may order a secured creditor of the company not to realise or otherwise deal with the security interest, except as permitted by the order.

The Court may only make an order under subregulation (2) if satisfied that:

for the creditor to realise or otherwise deal with the security interest would have a material adverse effect on achieving the purposes of the plan; and

having regard to:

the terms of the plan; and

the terms of the order; and

any other relevant matter;

the creditor’s interests will be adequately protected.

The Court may order the owner or lessor of property that is used or occupied by, or is in the possession of, the company not to take possession of the property or otherwise recover it.

Subregulation (4) does not apply in relation to PPSA retention of title property of the company.

The Court may only make an order under subregulation (4) if satisfied that:

for the owner or lessor to take possession of the property or otherwise recover it would have a material adverse effect on achieving the purposes of the plan; and

having regard to:

the terms of the plan; and

the terms of the order; and

any other relevant matter;

the interests of the owner or lessor will be adequately protected.

An order under this regulation may be made subject to conditions.

An order under this regulation may only be made on the application of:

if paragraph (1)(a) applies—the restructuring practitioner for the company; or

if paragraph (1)(b) applies—the restructuring practitioner for the plan.

ASIC may, in writing, approve a form for the purposes of a provision of this Part.

This regulation is made for paragraph 491(2)(b) of the Act.

The information about a resolution that is to be set out in a notice is at least the following information:

the name of the company;

any business name of the company;

the ACN of the company;

if paragraph 491(2)(b) of the Act applies for a sub-fund of a CCIV because of section 1237B of the Act—the ARFN of the sub-fund;

the section of the Act under which the notice is being given;

the name and contact details of the liquidator;

the date on which the resolution was passed.

The notice must be published by the end of the next business day after a liquidator is appointed to administer the winding up of the company.

Note: If paragraph 491(2)(b) of the Act applies for a sub-fund of a CCIV because of section 1237B of the Act, that section translates most of this regulation’s references to the company so that they are references to the sub-fund.

For the purposes of subsection 498(3) of the Act, the following information is prescribed:

whether, in the directors’ opinion, there are reasonable grounds to believe that the company has entered into a transaction that would be voidable under section 588FE of the Act, other than a transaction that would be an unfair preference;

whether, in the directors’ opinion, there are reasonable grounds to believe that, on the declaration being given, the eligibility criteria for the simplified liquidation process will be met in relation to the company, and the reasons for that opinion.

For the purposes of paragraph 500AA(1)(d) of the Act, the test for eligibility is that the total liabilities of the company on the day on which the triggering event occurred must not exceed $1 million.

For the purposes of paragraph 500AA(1)(e) of the Act, a period of 7 years is prescribed.

For the purposes of paragraph 500AA(1)(f) of the Act, a period of 7 years is prescribed.

For the purposes of paragraph 500AA(2)(b) of the Act, a prescribed circumstance is that:

the other company is a related body corporate of the company in relation to which the eligibility criteria are to be met; and

the other company is, or has been:

under restructuring; or

the subject of a simplified liquidation process; and

if subparagraph (b)(i) applies—the restructuring practitioner for the other company was appointed no more than 20 business days before the day on which the company in relation to which the eligibility criteria are to be met began to follow the simplified liquidation process; and

if subparagraph (b)(ii) applies—the other company began to follow the simplified liquidation process no more than 20 business days before the day on which the company in relation to which the eligibility criteria are to be met began to follow the simplified liquidation process.

For the purposes of paragraph 500AA(2)(c) of the Act, a prescribed circumstance is that:

the company has been under restructuring; and

the restructuring terminated no more than 20 business days before the day on which the company began to follow the simplified liquidation process.

Subdivision B—Simplified liquidation process

This regulation is made for the purposes of paragraph 500AE(3)(b) of the Act.

An unfair preference of a company is not voidable despite subsection 588FE(2) of the Act, provided either subregulation (3) or (4) is satisfied.

This subregulation is satisfied if:

the company is subject to the simplified liquidation process; and

the transaction was entered into, or an act was done for the purposes of giving effect to it, before the day that is 3 months before the relation-back day; and

no creditor under the transaction is a related entity of the company.

This subregulation is satisfied if:

the company is subject to the simplified liquidation process; and

the transaction was entered into, or an act was done for the purposes of giving effect to it:

during the 3 months ending on the relation-back day; or

after that day but on or before the day when the winding up began; and

either:

the transaction results in the creditor receiving from the company no more than $30,000 in value; or

if the transaction forms part of a series of related transactions, all of the related transactions result in the creditor receiving from the company no more than $30,000 in value; and

no creditor under the transaction is a related entity of the company.

This regulation is made for the purposes of paragraph 500AE(3)(f) of the Act and applies in relation to the liquidator of a company that is subject to the simplified liquidation process.

If, in the opinion of the liquidator, there are reasonable grounds to believe that:

a past or present officer or employee, or a member or contributory, of the company; or

a person who has taken part in the formation, promotion, administration, management or winding up of the company;

may have engaged in conduct constituting an offence under a law of the Commonwealth or a State or Territory in relation to the company that has had, or is likely to have, a material adverse effect on the interests of the creditors as a whole or of a class of creditors as a whole, the liquidator must:

as soon as practicable, and in any event within 6 months, after first forming the opinion, lodge with ASIC a report in the prescribed form (if any) with respect to the matter and state in the report whether the liquidator proposes to make an application for an examination or order under section 597 of the Act; and

give ASIC such information, and give to it such access to and facilities for inspecting and taking copies of any documents, as ASIC requires.

The liquidator may also, if the liquidator thinks fit, lodge further reports specifying any other matter that, in the liquidator’s opinion, it is desirable to bring to the notice of ASIC.

If it appears to the Court, in the course of winding up a company, that:

a person mentioned in paragraph (2)(a) or (b) has engaged in conduct constituting an offence under a law of the Commonwealth or a State or Territory in relation to the company that has had, or is likely to have, a material adverse effect on the interests of the creditors as a whole or of a class of creditors as a whole; and

the liquidator has not lodged with ASIC a report with respect to the matter;

the Court may, on the application of a person interested in the winding up, direct the liquidator to lodge such a report.

This regulation is made for the purposes of paragraph 500AE(3)(f) of the Act.

If the liquidator of a company adopts the simplified liquidation process on a day, the liquidator must, within 2 business days after that day, lodge with ASIC:

notice in the prescribed form (if any) of the adoption; and

a copy of the declaration given by the directors of the company to the liquidator in accordance with section 498 of the Act.

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

Subdivision C—Ceasing of simplified liquidation process

For the purposes of paragraph 500AC(1)(b) of the Act, a prescribed circumstance is that the liquidator believes on reasonable grounds that:

the company, or a director of the company, has engaged in conduct; and

the conduct involved fraud or dishonesty; and

the conduct has had, or is likely to have, a material adverse effect on the interests of the creditors as a whole or of a class of creditors as a whole.

The liquidator is taken to have ceased to follow the simplified liquidation process on the day on which the liquidator first held the belief.

This regulation is made for the purposes of subsection 500AC(2) of the Act.

Notice of cessation of process

If the liquidator of a company ceases to follow the simplified liquidation process on a day, the liquidator must, within 2 business days after that day, lodge with ASIC notice in the prescribed form (if any) of the cessation.

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

Validity of things done during process

Subject to this regulation, the cessation of the simplified liquidation process in relation to a company does not affect the validity of anything that was done in good faith in relation to the company before the cessation.

Reports by liquidator

If, at any time during the simplified liquidation process, it appeared to the liquidator that one or more of the circumstances in paragraph 533(1)(a), (b) or (c) existed, within 6 months” and substituting “within 6 months after the day on which the simplified liquidation process in relation to the company ended”.section 533 of the Act applies in relation to the liquidator as if paragraph 533(1)(d) were modified by omitting “

For the purposes of paragraph 500AD(b) of the Act, a person who is a related entity, and a creditor, of the company is not to be taken into account.

(1) This regulation is made for the purposes of paragraph (n) of the definition of managed investment scheme in section 9 of the Act.

(2) An approved benefit fund (Life Insurance Act 1995) is declared not to be a managed investment scheme.within the meaning of subsection 16B(1) of the

(2A) A scheme (a litigation funding scheme) that has all of the following features is declared not to be a managed investment scheme:

the dominant purpose of the scheme is for each of its general members to seek remedies to which the general member may be legally entitled;

the possible entitlement of each of its general members to remedies arises out of:

the same, similar or related transactions or circumstances that give rise to a common issue of law or fact; or

different transactions or circumstances but the claims of the general members can be appropriately dealt with together;

the possible entitlement of each of its general members to remedies relates to transactions or circumstances that occurred before or after the first funding agreement (dealing with any issue of interests in the scheme) is finalised;

the steps taken to seek remedies for each of its general members include a lawyer providing services in relation to:

making a demand for payment in relation to a claim; or

lodging a proof of debt; or

commencing or undertaking legal proceedings; or

investigating a potential or actual claim; or

negotiating a settlement of a claim; or

administering a deed of settlement or scheme of settlement relating to a claim;

(e) a person (the funder) provides funds, indemnities or both under a funding agreement (including an agreement under which no fee is payable to the funder or lawyer if the scheme is not successful in seeking remedies) to enable the general members of the scheme to seek remedies;

the funder is not a lawyer or legal practice that provides a service for which some or all of the fees, disbursements or both are payable only on success.

(3) A scheme (a litigation funding scheme) that has all of the following features is declared not to be a managed investment scheme:

the scheme relates to a Chapter 5 body corporate;

the creditors or members of the body corporate provide funds (including through a trust), indemnities or both to the body corporate or external administrator;

the funds, indemnities or both enable the external administrator or the body corporate to:

conduct investigations; or

seek or enforce a remedy against a third party; or

defend proceedings brought against the body corporate in relation to the external administration of the body corporate (other than in relation to allegations, made by creditors or members of the body corporate, of negligence or non-performance of duties by the external administrator).

(4) An arrangement (a litigation funding arrangement) that has all of the following features is declared not to be a managed investment scheme:

the dominant purpose of the arrangement is proving claims made by a general member who is an individual under Division 6 of Part 5.6 of the Act (which may include the funding of the preparation and the lodgement of the proofs);

the steps taken under the arrangement include a lawyer providing services in relation to:

making a demand for payment in relation to a claim; or

lodging a proof of debt; or

commencing or undertaking legal proceedings; or

investigating a potential or actual claim; or

negotiating a settlement of a claim; or

administering a deed of settlement or scheme of settlement relating to a claim;

(c) a person (the funder) provides funds, indemnities or both under a funding agreement (including an agreement under which no fee is payable to the funder or lawyer if the arrangement is not successful in proving claims) to enable the general member to prove the claims;

the funder is not a lawyer or legal practice that provides a service for which some or all of the fees, disbursements or both are payable only on success;

the arrangement is not a litigation funding scheme.

(5) An arrangement (a litigation funding arrangement) that has all of the following features is declared not to be a managed investment scheme:

the dominant purpose of the arrangement is for a general member to seek remedies to which the general member may be legally entitled;

the steps taken to seek remedies include a lawyer providing services in relation to:

making a demand for payment in relation to a claim; or

lodging a proof of debt; or

commencing or undertaking legal proceedings; or

investigating a potential or actual claim; or

negotiating a settlement of a claim; or

administering a deed of settlement or scheme of settlement relating to a claim;

(c) a person (the funder) provides funds, indemnities or both under a funding agreement (including an agreement under which no fee is payable to the funder or lawyer if the arrangement is not successful in seeking remedies) to enable the general member to seek remedies;

the funder is not a lawyer or legal practice that provides a service for which some or all of the fees, disbursements or both are payable only on success;

the arrangement is not a litigation funding scheme.

In this regulation:

external administrator includes an administrator, a liquidator (including a provisional liquidator) and a controller.

general member:

in relation to a litigation funding scheme—means a member of the scheme who:

is not the funder; and

is not a lawyer providing services for the purposes of the scheme; and

in relation to a litigation funding arrangement—means the party to the arrangement who:

is not the funder; and

is not a lawyer providing services for the purposes of the arrangement.

Sunset of subregulation (2A)

Subregulation (2A) is repealed on 1 December 2032.

For section 601QB of the Act, the operation of the Act is modified in accordance with this Division.

The register of members of a registered scheme need not contain information about a member whose only interest in the scheme is as the holder of an option.

If a registered scheme is quoted on 2 or more declared financial markets, paragraph 253F(a) of the Act is to be applied so that the value of an interest in the registered scheme is taken to be the last sale price, on the market on which the scheme is listed, on the trading day immediately before the day on which the poll is taken.

ASIC must not register a managed investment scheme under Part 5C.1 of the Act if the name of the scheme stated under subregulation 5C.1.01(2) does not comply with subregulation 5C.1.01(3).

Subsection 601ED(2) of the Act has effect as if the words ‘and Division 2 of Part 7.9 applied to the interests at that time’ were inserted after the words ‘when the issues were made’.

In determining the liability under subsection 601FB(2) of the Act of the responsible entity of a registered scheme to the members of the scheme for an act or omission of an agent appointed by the entity under that subsection, the amount recovered under subsection 601FB(4) of the Act is to be disregarded.

For section 601SAB of the Act, this regulation prescribes the obligation of a licensed trustee company to provide an annual information return.

The licensed trustee company commits an offence if:

a person mentioned in subregulation (3) requests an annual information return; and

the company does not provide the return to the person in accordance with the requirements in subregulations (5), (6) and (8) and regulation 5D.2.02.

Penalty: 500 penalty units.

A person commits an offence if the person is involved in a contravention of subregulation (1) by a licensed trustee company.

Penalty:

for an individual—50 penalty units; and

for a body corporate—500 penalty units.

A person may request an annual information return if the person is one of the following:

in the case of the estate of a deceased person:

if the person died testate—a beneficiary under the deceased person’s will; or

if the person died intestate—a person who, under a law of a State or Territory, has, is entitled to, or claims to be entitled to, an interest in the deceased person’s estate; or

a person who has commenced a proceeding in a court, under a law of a State or Territory, to seek to be included as a beneficiary of the deceased person’s estate;

in relation to a charitable trust:

the settlor, or one of the settlors, of the trust; or

a person who, under the terms of the trust, has power to appoint or remove a trustee of the trust or to vary (or cause to be varied) any of the terms of the trust; or

a person, or a person’s appointed successor, who is named in the instrument establishing the trust as a person who must, or may, be consulted by the trustee or trustees before distributing or applying money or other property for the purposes of the trust;

in the case of any other trust:

the settlor, or one of the settlors, of the trust; or

a person who, under the terms of the trust, has power to appoint or remove a trustee of the trust or to vary (or cause to be varied) any of the terms of the trust; or

a beneficiary of the trust.

The person must make the request for an annual information return in writing to the licensed trustee company and may indicate in the request which one of the following forms of return is required:

by sending it to the person’s postal address;

by emailing it to a nominated email address.

The annual information return must be provided within 30 days after the request from the person is received by the licensed trustee company, and then annually.

The annual information return must be for the last financial year that the licensed trustee company has provided a service to the person who has requested the return.

However, the licensed trustee company is not required to provide an annual information return covering a period:

before 1 July 2010; or

before it provided a service to the person.

The annual information return must be provided as follows:

if requested in a particular form—in the form requested;

in all other cases—by sending it to the person’s postal address.

The annual information return provided by a licensed trustee company must include the following:

for a person mentioned in subparagraphs 5D.2.01(3)(a)(i) and (ii) and (c)(iii):

details of income earned on the person’s interest in the trust or estate; and

details of expenses in operating the trust or estate in relation to the person’s interest in the trust or estate; and

the net value of the person’s interest in the trust or estate;

for any other person mentioned in subregulation 5D.2.01(3):

details of income earned on the trust’s assets; and

details of expenses in operating the trust’s assets, including remuneration, commission or other benefits received by the trustee company; and

the net value of the trust’s assets;

if required under the terms of the trust—a copy of the trust’s audit report and financial statements for the year.

This Division is made for section 601SCC of the Act.

A licensed trustee company may:

establish accounts within a common fund; and

establish a common fund on the basis of units or another suitable basis.

If the common fund includes money that is not estate money and that is not otherwise held in trust, the licensed trustee company is taken to hold the money in trust for the person on whose behalf the money is invested in the common fund.

A licensed trustee company that is establishing a common fund commits an offence if, at the time of establishing the fund, it does not ensure that its Board makes a decision, in writing, about the following:

any limitation on the amount of money that will form the common fund;

the investment strategy for the common fund, including the following:

the class of investments in which the common fund may be invested;

the procedure for valuing the investments;

if the trustee company is to seek expert advice about proposed investments—the type of expert advice to be sought;

the amount of fees that are to be paid by:

the common fund for the provision of traditional trustee company services; and

each account in the common fund;

the manner in which a withdrawal can be made from the common fund;

the procedure for auditing the common fund;

if the common fund is to have a limited life—the duration of the common fund;

if the common fund is to have a minimum amount that may be invested in the fund on account of each estate—the minimum amount.

Penalty: 500 penalty units.

The licensed trustee company commits an offence if it does not:

within 14 days of making the decision:

send a copy of the decision to ASIC; and

publish a copy of the decision on its website; and

if requested by a person entitled to request an annual information return under subregulation 5D.2.01(3), make a copy of the decision available to the person within 30 days of the request being received.

Penalty: 500 penalty units.

A person commits an offence if the person is involved in a contravention of subregulation (1) or (2) by a licensed trustee company.

Penalty:

for an individual—50 penalty units; and

for a body corporate—500 penalty units.

Compliance with the Act and regulations

A licensed trustee company may, from time to time and without liability for breach of trust, pay into or withdraw an amount from a common fund in accordance with the Act and these Regulations.

Note: Payments into a common fund may be prohibited where this is contrary to the conditions on which the company holds the money: see subsection 601SCB(3) of the Act.

Withdrawals

A licensed trustee company may do the following:

withdraw an amount from a common fund for a purpose relating to a trust or estate that is part of the fund and is managed or administered by the company;

withdraw from a common fund an amount at credit in the fund on account of a trust matter or a managed estate and invest the amount on the separate account of the matter or estate.

A licensed trustee company commits an offence if it pays interest from the common fund on withdrawn amounts on or after the day of the withdrawal.

Penalty: 500 penalty units.

Derivatives

A licensed trustee company commits an offence if:

when managing and administering a common fund, the trustee company enters into a derivative; and

at the time of entering into the derivative:

the trustee company did not do so for the purpose of managing a financial risk arising from:

(A) variations in the expenses of the common fund; or

(B) variations in the revenue obtainable from investments made by the common fund; and

the arrangement was not in accordance with the trustee company’s equitable and other duties as a trustee under the relevant State or Territory provisions set out in Schedule 8AE.

Penalty: 500 penalty units.

Applying income from investment

A licensed trustee company commits an offence if it applies income from investment of a common fund other than for:

payment of the company’s fee for the proper administration and management of the fund under the Act, regulations and terms of the common fund, proportionate to the value of the work done or the services rendered; and

allocation in accordance with subregulation (6) in relation to the accounts from which the fund is derived.

Penalty: 500 penalty units.

For paragraph (5)(b), the allocation must be made at intervals not exceeding 6 months.

Investments

A licensed trustee company commits an offence if:

the trustee company invests money committed to its administration or management; and

the investment is:

not in accordance with a decision of the Board made for the purpose of regulation 5D.2.05; and

not made in a manner in which trust funds may be invested by a trustee under the relevant State or Territory provisions set out in Schedule 8AE.

Penalty: 500 penalty units.

Valuation of investments

A licensed trustee company commits an offence if it does not comply with the following requirements about the valuation of investments of common funds:

by the third business day of each month, the trustee company must decide the value of the investments in each common fund as at the first business day of the month;

subject to subregulation (9), in deciding the value of securities listed on a financial market for a month, the trustee company must take the last sale price of the first business day of the month published by the market operator as the value of the listed securities;

the trustee company must make withdrawals from the common fund and further investments on the basis of the last valuation of investments made by the company.

Penalty: 500 penalty units.

The requirement in paragraph 8(b) does not apply if, in a particular month, the licensed trustee company decides it is in the best interests of each account in the common fund that a sale price used for the valuation be one taken later in that month.

Realising investments

A licensed trustee company may sell investments belonging to a common fund.

A licensed trustee company that has realised an investment in a common fund commits an offence if it does not credit or debit a profit or loss from the investment to the unit holders of the common fund:

in proportion to the amount invested in the common fund by the unit holders at the time of the realisation; and

within 14 days of the realisation.

Penalty: 500 penalty units.

Offence for involvement in contravention

A person commits an offence if the person is involved in a contravention of subregulation (3), (4), (5), (7), (8) or (11) by a licensed trustee company.

Penalty:

for an individual—50 penalty units; and

for a body corporate—500 penalty units.

A licensed trustee company commits an offence if it does not maintain a register of investments for each common fund in accordance with subregulation (2).

Penalty: 500 penalty units.

The register must contain:

a record identifying each investment made by the common fund; and

details of amounts held to the credit of the common fund.

Note: For other obligations relating to common funds: see section 601SCB of the Act.

A person commits an offence if the person is involved in a contravention of subregulation (1) by a licensed trustee company.

Penalty:

for an individual—50 penalty units; and

for a body corporate—500 penalty units.

A licensed trustee company must comply with this regulation in relation to each common fund established by the company that is not a registered scheme.

Account keeping

The licensed trustee company commits an offence if it does not keep accounts that:

correctly record and explain its transactions for the common fund and the fund’s financial position and performance; and

would enable true and fair financial statements to be prepared and audited.

Penalty: 500 penalty units.

Auditing

The licensed trustee company commits an offence if it does not:

have the financial statements for a financial year for the common fund audited by a registered company auditor; and

obtain an auditor’s report for the financial statements.

Penalty: 500 penalty units.

Lodging financial statements with ASIC

The licensed trustee company commits an offence if it does not lodge the audited financial statements for the fund with ASIC within 3 months of the end of the financial year.

Penalty: 500 penalty units.

Request for financial information

A person who is entitled to request an annual information return under subregulation 5D.2.01(3) may request, in writing, that the licensed trustee company provide the information mentioned in subregulation (7).

The licensed trustee company commits an offence if it does not provide the information mentioned in subregulation (7) to the person within 30 days of receiving the request under subregulation (5).

Penalty: 500 penalty units.

The information that must be provided is:

a copy of the common fund’s financial statements and audit report; and

the classes of investments in which the common fund is invested and how the investment is divided between each class; and

the trustee company’s investment strategy for the common fund.

Offence for involvement in contravention

A person commits an offence if the person is involved in a contravention of subregulation (2), (3), (4), or (6) by a licensed trustee company.

Penalty:

for an individual—50 penalty units; and

for a body corporate—500 penalty units.

For paragraph 761D(1)(b) of the Act, the prescribed period is:

for a foreign exchange contract—3 business days; and

in any other case—1 business day.

For subsection 761D(2) of the Act, and subject to this regulation, an arrangement is declared to be a derivative if the following conditions are satisfied in relation to the arrangement:

the arrangement is not a foreign exchange contract;

under the arrangement, a party to the arrangement must, or may be required to, provide at some future time (which may be less than 1 day after the arrangement is entered into) consideration of a particular kind or kinds to someone;

the amount of the consideration, or the value of the arrangement, is ultimately determined, derived from or varies by reference to (wholly or in part) the value or amount of something else (of any nature whatsoever and whether or not deliverable), including, for example, one or more of the following:

an asset;

a rate (including an interest rate or exchange rate);

an index;

a commodity.

An arrangement under which:

a party has, or may have, an obligation to buy tangible property (other than Australian or foreign currency) at a price and on a date in the future; and

another party has, or may have, an obligation to sell that property; and

the arrangement does not permit the seller’s obligations to be wholly settled by cash, or by set-off between the parties, rather than by delivery of the property; and

neither usual market practice, nor the rules of a licensed market or a licensed CS facility, permits the seller’s obligations to be closed out by the matching up of the arrangement with another arrangement of the same kind under which the seller has offsetting obligations to buy;

is not an arrangement to which subregulation (2) applies to the extent only that the arrangement deals with that purchase and sale.

An arrangement under which:

a party has an obligation to buy property; and

another party has an obligation to sell the property;

is not an arrangement to which subregulation (2) applies merely because the arrangement provides for the consideration to be varied by reference to a general inflation index (for example, the Consumer Price Index).

A contract for the future provision of services is not an arrangement to which subregulation (2) applies.

A thing that is described in subsection 764A(1) of the Act, other than paragraph 764A(1)(c), is not an arrangement to which subregulation (2) applies.

For paragraph 761D(3)(d) of the Act, each of the following is declared not to be a derivative:

tradeable water rights;

an arrangement:

(i) under which a person (the seller) has, or may have, an obligation to sell tradeable water rights at a future date; and

(ii) under which another person (the buyer) has, or may have, an obligation to buy the tradeable water rights, or replacement water rights, at a future date; and

that does not permit the seller’s obligations to be wholly settled by cash, or by set-off between the seller and the buyer, rather than by transfer of ownership of the tradeable water rights or replacement water rights; and

in relation to which neither usual market practice, nor the rules of a licensed market or of a licensed CS facility, allow the seller’s obligations to be closed out by matching up the arrangement with another arrangement of the same kind under which the seller has offsetting obligations to buy the tradeable water rights or replacement water rights;

a carbon abatement contract.

Note: For carbon abatement contract, see subregulation 1.0.02(1).

(8A) For paragraph 761D(3)(d) of the Act, a Help to Buy arrangement (within the meaning of the Help to Buy Act 2024) is declared not to be a derivative.

Subregulations (4) to (8A) apply whether or not a matter mentioned in those subregulations is described in subsection 761D(1) of the Act.

In subregulation (8):

replacement water rights means tradeable water rights that are granted, issued or authorised as a replacement for the seller’s tradeable water rights, including as a result of transformation arrangements mentioned in subsection 97(1) of the Water Act 2007.

tradeable water rights has the same meaning as in the Water Act 2007.

(1) For custodial arrangement in subsection 1012IA(1) of the Act.section 761CA of the Act, this regulation applies in relation to paragraph (a) of the definition of

Each of the following is a kind of financial product:

for interests in a managed investment scheme, all the interests in that managed investment scheme;

in any other case, all the financial products issued by a person or the person’s related bodies corporate.

For section 761CA of the Act, this regulation applies in relation to paragraph 1017F(4)(d) of the Act.

An interest in a managed investment scheme is in the same class as another interest in a managed investment scheme if they are both interests in the same managed investment scheme.

For section 761CA of the Act, this regulation applies in relation to paragraph 1017F(4)(d) of the Act.

A superannuation product is in the same class as another superannuation product if they are both issued by the same superannuation entity.

For the purposes of subsection 761CAA(2) of the Act, a person is not a claimant intermediary in the circumstances set out in subregulation (2), (4), (5), (6), (7), (8), (9), (10), (11) or (12).

Mortgage brokers and mortgage intermediaries

The circumstances are:

the person is a mortgage broker or mortgage intermediary; and

the mortgage broker or mortgage intermediary provides a credit service to a consumer; and

the mortgage broker or mortgage intermediary represents the consumer in pursuing a claim under an insurance product.

(3) Expressions used in subregulation (2) that are also used in the National Consumer Credit Protection Act 2009 have the same meaning in that subregulation as they have in that Act.

Insurance brokers

(4) The circumstances are that the person is an insurance broker (within the meaning of the Insurance Contracts Act 1984).

Qualified accountants

The circumstances are:

the person is a qualified accountant; and

(b) the qualified accountant provides one or more of the following services to a person (the client):

preparing a financial report or financial statements (including, but not limited to, a financial report or financial statements required under the Act);

auditing financial records;

(iii) a tax agent service (within the meaning of the Tax Agent Services Act 2009);

if the qualified accountant is a limited licensee (within the meaning of subregulation 7.6.04(3)) or supervises and has responsibility for the provision of financial services covered by the financial services licence of a limited licensee—a financial service covered by the financial services licence of the limited licensee; and

the qualified accountant represents the client in pursuing a claim under an insurance product.

Veterinarians

The circumstances are:

(a) the person (the veterinarian) is registered under the law of a State or Territory as a veterinarian, veterinary practitioner or veterinary surgeon; and

the veterinarian represents a person insured under an insurance product in pursuing a claim under the product; and

the claim relates to the management or prevention of a disease, injury or condition of an animal covered by the insurance product.

Travel agents

The circumstances are:

the person is a travel agent; and

the travel agent represents a person insured under an insurance product in pursuing a claim under the product; and

the claim relates to any of the following matters covered by the insurance product:

financial loss for fares for any form of transport or accommodation to be used in the course of a specified journey if the insured person does not start or complete the journey;

loss or damage to personal belongings while the insured person is on a specified journey;

a sickness or disease contracted, or injury sustained, by the insured person on a specified journey;

loss, damage or compensation for an event affecting the insured person on a specified journey that ordinarily forms a part of insurance commonly regarded as travel insurance, including loss of cash or credit cards, legal liability, hijack, kidnap or ransom.

Financial advisers

The circumstances are:

the person is a financial services licensee whose Australian financial services licence covers the provision of financial product advice; or

both of the following are satisfied:

the person is an authorised representative of a financial services licensee whose Australian financial services licence covers the provision of financial product advice;

the person is authorised by the licensee to provide financial product advice on behalf of the licensee.

Financial counsellors

(9) The circumstances are that the person is a member of one of the following bodies, acting in that capacity:

Financial Counselling Australia Ltd;

Financial Counsellors Association of New South Wales Inc;

Financial and Consumer Rights Council Inc.;

Financial Counsellors Association of Queensland Inc.;

Financial Counsellors Association of Western Australia Inc;

The South Australian Financial Counsellors’ Association Incorporated;

Financial Counselling Tasmania Inc.;

Financial Counsellors ACT;

Money Workers Association of the Northern Territory Incorporated.

Property managers

The circumstances are:

(a) the person (the property manager) carries on a business of managing property; and

the property manager manages property on behalf of one or more other persons; and

the property manager represents a person insured under an insurance product in pursuing a claim in relation to the property under the insurance product.

Estate management

The circumstances are:

(a) the person (the estate manager) administers the estate of a person who is:

deceased; or

incapable of managing the person’s own affairs because of physical or mental incapacity; and

the estate manager represents a person insured under an insurance product in pursuing a claim under the insurance product; and

the claim relates to the estate or its administration.

Public Trustees etc.

The circumstances are:

(a) the person (the estate manager) is the Public Trustee (however described) of a State or Territory; and

the estate manager administers the estate of a person; and

the estate manager represents a person insured under an insurance product in pursuing a claim under the insurance product; and

the claim relates to the estate or its administration.

For section 761CA of the Act, this regulation applies in relation to paragraph 917C(3)(ba) of the Act.

The following are kinds of financial product:

motor vehicle insurance;

home building insurance;

home contents insurance;

sickness and accident insurance;

consumer credit insurance;

travel insurance.

For the purposes of paragraph 761DA(2)(b) of the Act, circumstances in which a person’s provision of claims handling and settling services on behalf of one or more insurers is taken not to be the primary part of a business carried on by the person are when those services are:

investigating the validity of claims under insurance products, or providing assistance in relation to such investigations; or

assessing the extent of insurers’ liabilities to other persons under insurance products under which claims are made, or providing assistance in relation to such assessments.

This regulation applies in relation to a financial product that:

is a derivative; and

is entered into, or acquired through a facility conducted in accordance with:

(i) the Corporations (Exempt Futures Market—National Wholesale Electricity) Declaration 1999; or

(ii) the Corporations (Exempt Futures Market) Declaration 2001.

For paragraph 761E(7)(a) of the Act, each person who is a party to the financial product is taken to be an issuer of the financial product.

For paragraph 761E(7)(a) of the Act, subsections 761E(5) and (6) of the Act do not apply to the financial product.

This regulation applies if a member of a superannuation fund, who has a superannuation interest in the growth phase, elects to receive a pension in relation to that interest or part of that interest.

For paragraph 761E(7)(a) of the Act, the superannuation fund is taken to issue a new financial product when:

it acknowledges receipt of the member’s election; or

it makes the first payment of the pension;

whichever occurs first.

For this regulation:

growth phase has the meaning given by regulation 1.03AB of the SIS Regulations.

pension has the meaning given by subregulation 1.06(1) of the SIS Regulations.

For section 761CA of the Act, this regulation applies for subsections 917A(3), 917C(2) and 917C(3) of the Act.

Each of the following is a class of financial services:

the provision of financial product advice relating to a general insurance product;

the provision of financial product advice relating to an investment life insurance product;

the provision of financial product advice relating to a life risk insurance product;

dealing in a financial product that is a general insurance product;

dealing in a financial product that is an investment life insurance product;

dealing in a financial product that is a life risk insurance product;

the provision of a claims handling and settling service in relation to a general insurance product;

the provision of a claims handling and settling service in relation to an investment life insurance product;

the provision of a claims handling and settling service in relation to a life risk insurance product.

This regulation applies to a financial product that is a foreign exchange contract that is not entered into, or traded, on a financial market.

For paragraph 761E(7)(a) of the Act, each party to the foreign exchange contract is an issuer of the product.

This regulation is made for the purposes of paragraph 764A(1)(m) of the Act.

The following are declared to be financial products:

an interest in a litigation funding scheme mentioned in regulation 5C.11.01;

an interest in a litigation funding arrangement mentioned in that regulation.

For the purposes of paragraph 765A(1)(j) of the Act, each of the following is not a financial product:

(a) the credit card system operated within Australia known as the MasterCard system or MasterCard network card system and designated as a payment system under Payment Systems (Regulation) Act 1998 on 12 April 2001;section 11 of the

(b) the credit card system operated within Australia known as the VISA system or the VISA network card system and designated as a payment system under Payment Systems (Regulation) Act 1998 on 12 April 2001;section 11 of the

(c) the debit card system operated within Australia known as Visa debit and designated as a payment system under Payment Systems (Regulation) Act 1998 on 23 February 2004;section 11 of the

(d) the payment system operated within Australia known as the ATM system and designated by Designation No 1 of 2008 as a payment system under section 11 of the Payment Systems (Regulation) Act 1998 on 10 December 2008;

(e) the debit card system operated within Australia known as the EFTPOS system and designated by Designation No 1 of 2012 as a payment system under subsection 11(1) of the Payment Systems (Regulation) Act 1998 on 12 June 2012;

(f) the debit card system operated within Australia known as Debit MasterCard and designated by Designation No 2 of 2015 (Designation of the Debit MasterCard system) as a payment system under subsection 11(1) of the Payment Systems (Regulation) Act 1998 on 15 October 2015;

(g) the prepaid card system operated within Australia and designated by Designation No 3 of 2015 (Designation of the EFTPOS prepaid system) as a payment system under subsection 11(1) of the Payment Systems (Regulation) Act 1998 on 15 October 2015;

(h) the prepaid card system operated within Australia known as MasterCard Prepaid and designated by Designation No 4 of 2015 (Designation of the MasterCard prepaid system) as a payment system under subsection 11(1) of the Payment Systems (Regulation) Act 1998 on 15 October 2015;

(i) the prepaid card system operated within Australia known as Visa Prepaid and designated by Designation No 5 of 2015 (Designation of the Visa prepaid system) as a payment system under subsection 11(1) of the Payment Systems (Regulation) Act 1998 on 15 October 2015.

For paragraph 765A(1)(q) of the Act, an exempt public sector superannuation scheme is prescribed.

(1) For subparagraph 765A(1)(h)(i) of the Act, each of the following is a credit facility:

the provision of credit:

for any period; and

with or without prior agreement between the credit provider and the debtor; and

whether or not both credit and debit facilities are available; and

that is not a financial product mentioned in paragraph 763A(1)(a) of the Act; and

that is not a security, a managed investment product, a foreign passport fund product, an investment life insurance product, a superannuation product or an RSA; and

that is not a financial product mentioned in paragraph 764A(1)(ba), or (j) of the Act; and

that is not a financial product mentioned in paragraph 764A(1)(i) of the Act, other than a product the whole or predominant purpose of which is, or is intended to be, the provision of credit;

a facility:

known as a bill facility; and

under which a credit provider provides credit by accepting, drawing, discounting or indorsing a bill of exchange or promissory note;

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);

the provision of credit by the trustee of the estate of a deceased person by way of an advance to a beneficiary or prospective beneficiary of the estate;

the provision of credit by an employer, or a related body corporate of an employer, to an employee or former employee (whether or not it is provided to the employee or former employee with another person);

a mortgage:

that secures obligations under a credit contract (other than a lien or charge arising by operation of any law or by custom); and

that is not a financial product mentioned in paragraph 763A(1)(a) of the Act; and

that is not a security, a managed investment product, a foreign passport fund product, an investment life insurance product, a superannuation product or an RSA; and

that is not a financial product mentioned in paragraph 764A(1)(ba), or (j) of the Act; and

that is not a financial product mentioned in paragraph 764A(1)(i) of the Act, other than a product the whole or predominant purpose of which is, or is intended to be, the provision of credit;

a guarantee related to a mortgage mentioned in paragraph (f);

a guarantee of obligations under a credit contract.

(2) The provision of consumer credit insurance that includes a contract of general insurance for the Insurance Contracts Act 1984 is not a credit facility.

The following are not credit facilities:

a litigation funding scheme mentioned in regulation 5C.11.01;

a litigation funding arrangement mentioned in regulation 5C.11.01.

In this regulation:

credit means a contract, arrangement or understanding:

under which:

(i) payment of a debt owed by one person (a debtor) to another person (a credit provider) is deferred; or

(ii) one person (a debtor) incurs a deferred debt to another person (a credit provider); and

including any of the following:

any form of financial accommodation;

a hire purchase agreement;

credit provided for the purchase of goods or services;

a contract, arrangement or understanding for the hire, lease or rental of goods or services, other than a contract, arrangement or understanding under which:

(A) full payment is made before or when the goods or services are provided; and

(B) for the hire, lease or rental of goods—an amount at least equal to the value of the goods is paid as a deposit in relation to the return of the goods;

an article known as a credit card or charge card;

an article, other than a credit card or a charge card, intended to be used to obtain cash, goods or services;

an article, other than a credit card or a charge card, commonly issued to customers or prospective customers by persons who carry on business for the purpose of obtaining goods or services from those persons by way of a loan;

a liability in respect of redeemable preference shares;

a financial benefit arising from or as a result of a loan;

assistance in obtaining a financial benefit arising from or as a result of a loan;

issuing, indorsing or otherwise dealing in a promissory note;

drawing, accepting, indorsing or otherwise dealing in a negotiable instrument (including a bill of exchange);

granting or taking a lease over real or personal property;

a letter of credit.

This regulation applies in relation to a financial product that would be a credit facility in accordance with regulation 7.1.06 if subparagraphs 7.1.06(1)(a)(iv), (v), (va) and (vi), and 7.1.06(1)(f)(ii), (iii), (iiia) and (iv) did not apply.

For paragraph 761E(7)(a) of the Act, and in relation to the financial product:

the credit provider is not taken to be the issuer of the financial product; and

the debtor is taken to be the issuer of the financial product.

For paragraph 766A(2)(b) of the Act, and in relation to the financial product:

the provision of financial product advice to the debtor, or the debtor’s representative, is taken not to be the provision of a financial service; and

a dealing in the credit facility by the credit provider, or the credit provider’s representative, is taken not to be the provision of a financial service.

In this regulation:

credit, credit provider and debtor have the same meanings as in subregulation 7.1.06(3).

(1) This regulation applies to an arrangement between 2 persons (person 1 and person 2) made in the following circumstances:

(a) person 1 enters into the arrangement in order to meet a requirement of another arrangement between person 1 and a person other than person 2 (person 3);

under the arrangement, person 2 undertakes to make a payment to, or perform an obligation for the benefit of, person 3 in circumstances specified as part of the arrangement;

under the arrangement, person 1 is liable to person 2 for any payments made, or liabilities, costs or expenses incurred, by person 2 in making the payment to, or performing the obligation for the benefit of, person 3;

the arrangement does not constitute a financial product under section 764A of the Act, other than a derivative.

For paragraph 765A(1)(y) of the Act, the arrangement is not a financial product.

(1) This regulation applies to an arrangement between 2 persons (person 1 and person 2) made in the following circumstances:

person 1 leases or rents something from person 2;

under the arrangement, person 1 makes a payment to person 2 to reduce the amount that person 1 would otherwise have to pay to person 2 under the leasing or rental agreement;

the payment relates to the event of an accident or other eventuality affecting the thing that is being leased or rented.

Example: Collision damage waiver insurance for a rental car.

For paragraph 765A(1)(y) of the Act, the arrangement is not a financial product.

For paragraph 765A(1)(y) of the Act, a bank draft, including (but not limited to):

a cheque drawn by a financial institution on itself; or

a cheque drawn by a financial institution on a financial institution other than itself;

is not a financial product.

For paragraph 765A(1)(y) of the Act, insurance under an overseas student health insurance contract is not a financial product.

In this regulation:

overseas student health insurance contract has the same meaning as in Private Health Insurance Rules made for the purposes of Part 4-2 of the Private Health Insurance Act 2007 (which is about health insurance business).

Note: In 2019, the meaning was given by rule 18 of the Private Health Insurance (Health Insurance Business) Rules 2018.

This regulation applies to a facility that consists of the rights of the holder of a debenture against a trustee under a trust deed entered into under:

section 283AA of the Act; or

Chapter 2L or Division 4 of Part 7.12 of the old Corporations Law.

For paragraph 765A(1)(y) of the Act, the facility is not a financial product.

For paragraph 765A(1)(y) of the Act, a money order issued as a money order by, or for, Australia Post is not a financial product.

For paragraph 765A(1)(y) of the Act, a non-cash payment facility is not a financial product if:

the issuer is:

(i) a body corporate that is an ADI (within the meaning of the Banking Act 1959); or

an operator of a payment system; and

under the facility, as instructed by the client, the issuer makes money available (or causes it to be made available) to a person nominated by the client:

within 2 business days of receiving the client’s instruction; or

within the time reasonably required to complete the transaction subject to any constraints imposed by law; and

under the facility the funds are transferred by electronic means for collection by, or for the credit of, the payer or another person; and

the issuer and the payer do not have a standing arrangement to transfer funds in this manner.

Example: Telegraphic transfers and international money transfers offered by banks and remittance dealers.

For paragraph 765A(1)(y) of the Act, Australian Capital Territory insurance, including insurance entered into by the Australian Capital Territory and another insurer as joint insurers, is not a financial product.

For paragraph 765A(1)(y) of the Act, a carbon abatement contract is declared not to be a financial product.

Note: For carbon abatement contract, see subregulation 1.0.02(1).

Advice about how to structure or use insurance claim payouts

For the purposes of paragraph 766B(7B)(b) of the Act, giving a recommendation or statement of opinion, or a report of either of those things, cannot reasonably be regarded as a necessary part of providing a claims handling and settling service if the recommendation, statement or report relates to:

how an amount to be paid to a person in settlement of a claim under an insurance product should be structured; or

the management or use of an amount paid, or to be paid, to a person in settlement of a claim under an insurance product.

Advice about other insurance products or financial products

For the purposes of paragraph 766B(7B)(b) of the Act, giving a recommendation or statement of opinion, or a report of either of those things, cannot reasonably be regarded as a necessary part of providing a claims handling and settling service if the recommendation, statement or report:

is given in response to a claim, or potential claim, made under an insurance product; and

relates to other insurance products not held by the person making the claim or financial products.

(1) For subparagraph (a)(ii) of the definition of exempt document or statement in subsection 766B(9) of the Act, the following documents and statements are prescribed (and so excluded from the definition):

a Product Disclosure Statement that:

contains personal advice; or

contains general advice about a financial product other than a financial product to which the Statement relates;

a Financial Services Guide that contains personal advice;

a document or statement that would, but for this regulation, be an exempt document or statement only because it is prepared or given in accordance with section 1018A of the Act;

a record of advice mentioned in subsection 946B(3A) of the Act.

For subregulation (1), if a person:

(a) acquires a financial product (product 1); and

will be able, by acquiring product 1, to give the product issuer an instruction to acquire a particular financial product or a financial product of a particular kind (within the meaning of section 1012IA of the Act) under a custodial arrangement (within the meaning of section 1012IA of the Act);

the Product Disclosure Statement for product 1 is taken to relate to the other financial product.

(3) For paragraph (b) of the definition of exempt document or statement in subsection 766B(9) of the Act, documents, information and statements that:

do not contain personal advice; and

are required by, and prepared as a result of, a requirement under an Australian law; and

(c) are included in a class of documents, information or statements specified by ASIC in a list published in the Gazette for this subregulation;

are prescribed (and so included in the definition).

(3A) For the purposes of paragraph (b) of the definition of exempt document or statement in subsection 766B(9) of the Act, the following documents and statements are prescribed (and so included in the definition):

a CSF offer document that does not contain personal advice;

a document or statement to the extent that it contains or draws information from a CSF offer document and attributes that information to the CSF offer document, if:

the information is published on the platform on which the CSF offer document is published, and does not contain personal advice; or

the information is a statement made on the communication facility for the CSF offer, and does not contain personal advice;

an advertisement or publication to the extent that the advertisement or publication:

contains or draws information from a CSF offer document and attributes that information to the CSF offer document; and

does not contravene subsection 738ZG(1) of the Act; and

does not contain personal advice.

(4) For paragraph (b) of the definition of exempt document or statement in subsection 766B(9) of the Act:

an assessment under subsection 985E(1) of the Act that a margin lending facility will not be unsuitable for the person to whom the margin lending facility is to be issued is prescribed (and so excluded from the definition); and

an assessment under subsection 985E(1) of the Act that a margin lending facility whose limit is proposed to be increased will not be unsuitable for the person for whom the limit of the margin lending facility is to be increased is prescribed (and so excluded from the definition).

Note: The effect of paragraph (b) of the definition of exempt document or statement in subsection 766B(9), is that a prescribed document or statement is an exempt document or statement.

For paragraph 926B(1)(c) of the Act, Clean Energy Act 2011) as if section 766D of the Act were modified by inserting after subsection 766D(2) the following subsection:Part 7.6 of the Act applies in relation to free carbon units (within the meaning of the

(3) A person who holds a free carbon unit (within the meaning of the Clean Energy Act 2011) that has been issued to the person by the Clean Energy Regulator is taken not to be making a market for a financial product if the person states the price of the free carbon unit.

For paragraph 768A(1)(b) of the Act, the following obligations are prescribed:

each obligation arising from a contract to transfer a security;

each obligation arising from a contract to transfer a managed investment product;

each obligation arising from acquiring or providing a financial product mentioned in paragraph 764A(1)(c) of the Act;

each obligation arising from a contract to transfer a financial product mentioned in paragraph 764A(1)(j) of the Act;

each obligation arising from a contract to transfer a financial product mentioned in paragraph 764A(1)(ba) of the Act;

each obligation arising from a contract to transfer a foreign passport fund product;

each obligation arising from a contract to transfer a financial product mentioned in paragraph 764A(1)(k) of the Act;

each obligation arising from a contract to transfer a carbon unit, an Australian carbon credit unit or an eligible international emissions unit;

Note: See paragraphs 764A(1)(ka) and (kb) of the Act.

each obligation arising from a contract to transfer a right that includes an undertaking by a body to repay, as a debt, money deposited with or lent to the body;

each obligation arising from the entry into a repurchase agreement.

(2) In this regulation, repurchase agreement means a repurchase transaction, in relation to a financial product, entered into pursuant to:

The Bond Market Association and the International Securities Market Association Global Master Repurchase Agreement (known as the TBMA/ISMA Global Master Repurchase Agreement); or

another commonly used master agreement for repurchase transactions.

For paragraph 768A(2)(i) of the Act, the conduct of:

National Stock Exchange of Australia Limited, or an agent of that body; or

a participant of the National Stock Exchange of Australia Limited, or an agent of the participant; or

Bendigo Stock Exchange Limited, or an agent of that body; or

a participant of the Bendigo Stock Exchange Limited, or an agent of the participant;

in operating a facility in accordance with the operating rules of a licensed market does not constitute operating a clearing and settlement facility if the requirements of subregulation (3) are met.

For subregulation (2), the requirements are:

the market licensee must have, and must be responsible for enforcing, operating rules that apply to a participant of the licensed market in relation to the participant’s obligations arising from transactions carried out on the licensed market; and

a participant mentioned in paragraph (a), or an agent of the participant appointed in accordance with the operating rules of the licensed market, must be responsible for fulfilling the obligations owed to another participant or agent arising from transactions carried out on the licensed market; and

the market licensee is not the operator of any other clearing and settlement facility; and

each participant of the licensed market is not the operator of any other clearing and settlement facility; and

each agent of a participant of the licensed market is not the operator of any other clearing and settlement facility.

(1) For subparagraph 761G(5)(b)(i) of the Act, a motor vehicle insurance product is a contract or part of a contract that provides insurance cover (whether or not the cover is limited or restricted in any way) in respect of one or more of the following:

loss of, or damage to, a motor vehicle;

liability for loss of, or damage to, property caused by or resulting from impact of a motor vehicle with some other thing.

A motor vehicle insurance product does not include:

(a) insurance to or in relation to which the Marine Insurance Act 1909 applies; or

insurance entered into, or proposed to be entered into, for the purposes of a law (including a law of a State or Territory) that relates to:

workers’ compensation; or

compulsory third party compensation.

In this regulation:

motor vehicle means a vehicle that is designed: to travel by road; and to use volatile spirit, steam, gas, oil, electricity or any other power (not being human power or animal power) as its principal means of propulsion; and to carry passengers;

to travel by road; and

to use volatile spirit, steam, gas, oil, electricity or any other power (not being human power or animal power) as its principal means of propulsion; and

to carry passengers;

and includes a motor cycle.

However, a motor vehicle does not include:

an omnibus; or

a tram; or

a motor vehicle the carrying capacity of which exceeds 2 tonnes.

(1) For subparagraph 761G(5)(b)(ii) of the Act, a home building insurance product is a contract or part of a contract that provides insurance cover (whether or not the cover is limited or restricted in any way) in respect of destruction of or damage to a home building.

A home building insurance product does not include insurance entered into, or proposed to be entered into, for the purposes of a law (including a law of a State or Territory) that relates to building or construction work in relation to a home building.

In this regulation:

home building means:

a building used, or intended to be used, principally and primarily as a place of residence; and

out-buildings, fixtures and structural improvements used for domestic purposes, being purposes related to the use of the principal residence;

on the site and, without limiting the generality of the expression, includes:

fixed wall coverings, fixed ceiling coverings and fixed floor coverings (other than carpets); and

services (whether underground or not) that are the property of the insured or that the insured is liable to repair or replace or pay the cost of repairing and replacing; and

fences and gates wholly or partly on the site.

site means the site specified in the relevant contract of insurance as the site on which the building is situated.

A home building does not include:

a hotel; or

a motel; or

a boarding house; or

a building that:

is in the course of construction; and

is being constructed by the insured, or an intending insured, in the course of a construction business; or

a temporary building or structure or a demountable or moveable structure; or

a caravan (whether fixed to the site or not).

(1) For subparagraph 761G(5)(b)(iii) of the Act, a home contents insurance product is a contract or part of a contract that provides insurance cover (whether or not the cover is limited or restricted in any way) in respect of loss of or damage to the contents of a residential building.

A home contents insurance product does not include:

(a) insurance to or in relation to which the Marine Insurance Act 1909 applies; or

insurance entered into, or proposed to be entered into, for the purposes of a law (including a law of a State or Territory) that relates to:

workers’ compensation; or

compulsory third party compensation.

In this regulation:

contents means any of the following items: furniture, furnishings and carpets (whether fixed or unfixed); household goods; clothing and other personal effects; a picture; a work of art; a fur; a piece of jewellery; a gold or silver article; a document of any kind; a collection of any kind; swimming pools that: are not fixtures; and are owned by the insured or by a member of the insured’s family ordinarily residing with the insured; but does not include an article or thing to which the definition of residential building applies.

furniture, furnishings and carpets (whether fixed or unfixed);

household goods;

clothing and other personal effects;

a picture;

a work of art;

a fur;

a piece of jewellery;

a gold or silver article;

a document of any kind;

a collection of any kind;

swimming pools that:

are not fixtures; and

are owned by the insured or by a member of the insured’s family ordinarily residing with the insured;

but does not include an article or thing to which the definition of residential building applies.

residential building means:

a building used principally and primarily as a place of residence on the site; and

out-buildings used for domestic purposes, being purposes related to the use of the principal residence on the site.

A residential building does not include:

a hotel; or

a motel; or

a boarding house; or

a building that is in the course of construction; or

a temporary building or structure or a demountable or moveable structure.

(1) For subparagraph 761G(5)(b)(iv) of the Act, a sickness and accident insurance product is a contract or part of a contract that has either of the following characteristics:

the contract provides insurance cover (whether the cover is limited or restricted in any way) in respect of the insured person contracting a sickness or disease or a specified sickness or disease or sustaining an injury or a specified injury;

if the insured person dies as a result of the sickness, disease or injury, the contract provides insurance cover (whether the cover is limited or restricted in any way) in respect of the death.

A sickness and accident insurance product does not include:

sickness and accident policies which are guaranteed ‘renewable’ at the option of the insured or where the insurer guarantees not to cancel the policy in response to a change in the risk where such a policy has been effected for a predetermined period of years in excess of 1 year; or

(b) insurance to or in relation to which the Marine Insurance Act 1909 applies; or

insurance entered into, or proposed to be entered into, for the purposes of a law (including a law of a State or Territory) that relates to:

workers’ compensation; or

compulsory third party compensation; or

insurance that:

provides cover for the death of, or injury to, a driver of a motor vehicle which is caused by the fault of that person when driving; and

is provided only in conjunction with, and at no extra cost to, insurance mentioned in subparagraph (c)(ii).

Note: See also regulation 7.9.14B.

(1) For subparagraph 761G(5)(b)(v) of the Act, a consumer credit insurance product is a contract or part of a contract that has the following characteristics:

the contract provides insurance cover (whether the cover is limited or restricted in any way) in respect of:

the death of the insured person; or

the insured person contracting a sickness or disease; or

the insured person sustaining an injury; or

the insured person becoming unemployed;

the amount of the liability of the insurer under the contract is to be ascertained by reference to a liability of the insured person under a specified agreement to which the insured person is a party.

A consumer credit insurance product does not include:

(a) insurance to or in relation to which the Marine Insurance Act 1909 applies; or

insurance entered into, or proposed to be entered into, for the purposes of a law (including a law of a State or Territory) that relates to:

workers’ compensation; or

compulsory third party compensation.

(1) For subparagraph 761G(5)(b)(vi) of the Act, a travel insurance product is a contract or part of a contract that provides insurance cover (whether or not the cover is limited or restricted in any way) in respect of one or more of the following:

financial loss in respect of:

fares for any form of transport to be used; or

accommodation to be used;

in the course of the specified journey in the event that the insured person does not commence or complete the specified journey;

loss of or damage to personal belongings that occurs while the insured person is on the specified journey;

a sickness or disease contracted or an injury sustained by the insured person while on the specified journey;

loss, damage or compensation for an event occurring to the insured person during a specified journey that ordinarily forms a part of insurance commonly regarded as travel insurance, including

loss of cash or credit cards; and

legal liability; and

hijack; and

kidnap; and

ransom.

A travel insurance product does not include:

(a) insurance to or in relation to which the Marine Insurance Act 1909 applies; or

insurance entered into, or proposed to be entered into, for the purposes of a law (including a law of a State or Territory) that relates to:

workers’ compensation; or

compulsory third party compensation.

In this regulation:

specified journey means a journey in relation to which insurance cover is provided by the contract.

(1) For subparagraph 761G(5)(b)(vii) of the Act, a personal and domestic property insurance product is a contract or part of a contract that provides insurance cover (whether or not the cover is limited or restricted in any way) in respect of loss or damage to property that is:

wholly or predominantly used for personal, domestic or household purposes by:

the insured; or

a relative of the insured; or

any person with whom the insured resides; and

ordinarily used for that purpose.

A personal and domestic property insurance product does not include:

(a) insurance to or in relation to which the Marine Insurance Act 1909 applies; or

insurance entered into, or proposed to be entered into, for the purposes of a law (including a law of a State or Territory) that relates to:

workers’ compensation; or

compulsory third party compensation.

In this regulation:

property includes any of the following: moveables; valuables; a caravan or mobile home; an on-site mobile home; a trailer; a marine pleasure craft; a horse; a domestic pet; a mobile phone.

moveables;

valuables;

a caravan or mobile home;

an on-site mobile home;

a trailer;

a marine pleasure craft;

a horse;

a domestic pet;

a mobile phone.

relative means any of the following relatives of an insured person: mother; step-mother; father; step-father; brother; half-brother; sister; half-sister; spouse (including de facto spouse); son; step-son; adopted son; daughter; step-daughter; adopted daughter; grandparent; grandchild; nephew; niece; uncle; aunt; mother-in-law; father-in-law.

mother;

step-mother;

father;

step-father;

brother;

half-brother;

sister;

half-sister;

spouse (including de facto spouse);

son;

step-son;

adopted son;

daughter;

step-daughter;

adopted daughter;

grandparent;

grandchild;

nephew;

niece;

uncle;

aunt;

mother-in-law;

father-in-law.

For paragraph (1)(a), property is taken to be wholly or predominantly used for personal, domestic or household purposes if the insured gives the insurer a statement, before the insurance product is issued, that the property is intended to be used wholly or predominantly for 1 or more of those purposes.

For subparagraph 761G(5)(b)(viii) of the Act, a medical indemnity insurance product is prescribed.

For paragraph 761G(10)(a) of the Act, this regulation applies in relation to a class of financial products that:

are provided by the same product issuer to:

a particular person; or

an associate of the person; or

a body corporate controlled and wholly owned by the person; and

are provided at or about the same time.

The price for the provision of the financial products may be calculated by:

calculating the total price for the provision of all of the financial products in the class; and

treating the total price as the price for the provision to the particular person of a single financial product.

The value of the financial products may be calculated by:

calculating the total value of all of the financial products in the class; and

treating the total value as the value of a single financial product provided to the particular person.

For subsection 761G(6A) of the Act, a traditional trustee company service is not provided to a person as a retail client if:

the service is provided to the person for use in relation to a business that is not a small business; or

the person to whom the service is provided is a professional investor.

Note: Small business is defined in subsection 761G(12) of the Act and professional investor is defined in section 9 of the Act.

This regulation makes arrangements about the price for the provision of an investment-based financial product.

Note: Under paragraph 761G(7)(a) of the Act, if a financial product is not, or a financial service provided to a person does not relate to, a general insurance product, a superannuation product or an RSA, the financial product or financial service is provided to the person as a retail client unless the price for the provision of the financial product, or the value of the financial product to which the financial service relates, equals or exceeds the amount specified in regulations made for the purposes of that paragraph as being applicable in the circumstances.

Under paragraph 761G(10)(a) of the Act, the regulations may also deal with how a price or value referred to in that paragraph is to be calculated, either generally or in relation to a specified class of financial products.

In general, the ‘price’ of a product will be the amount that is paid to acquire or be issued with the financial product. The test for the price of the product in paragraph 761G(7)(a) of the Act will be determined at or before the time the client acquires, or is issued with, the financial product. If a client pays over $500 000 to acquire or be issued with the financial product, the client will be a wholesale client in respect of the product.

Price

For paragraph 761G(7)(a) of the Act, the amount applicable in relation to an investment-based financial product is $500 000.

Working out price: general rule

For paragraph 761G(10)(a) of the Act, the price of an investment-based financial product:

is the amount that is paid or payable to acquire or purchase the investment-based financial product; and

does not include any amount paid for or in respect of the investment-based financial product following its issue or acquisition unless the issue or acquisition would not have taken place without an arrangement to pay the amount.

Note: An amount deposited in a deposit account will not generally be regarded as part of the ‘price’ paid to acquire or purchase the financial product.

For subregulation (3), in calculating any amount payable or paid to acquire or purchase the investment-based financial product:

disregard any amount payable to the extent to which it is to be paid out of money lent by:

the person offering the investment-based financial product; or

an associate of that person; and

disregard any amount paid to the extent to which it was paid out of money lent by:

the person offering the investment-based financial product; or

an associate of that person; and

include any amount paid or payable to cover:

fees or charges that are paid to the issuer or any other person that relates to the issue of the investment-based financial product; and

fees or charges that are paid to the issuer or any other person that relates to the issue of the investment-based financial product; and

despite paragraph (c), disregard any amount of remuneration or other benefits paid or payable to a person for the provision of financial product advice or other related services provided directly to:

the client; or

another person acting on behalf of the client.

Group products

If the investment-based financial product is a group product covered by section 1012H of the Act:

the amount in subregulation (2) is to be used to determine the status of each person who elects, or may elect, to be covered by the investment-based financial product; and

subregulation (3) is to be used to determine the amount to be paid for the person to be covered by the investment-based financial product.

This regulation makes arrangements about the value of an investment-based financial product to which a financial service relates.

Note: Under paragraph 761G(7)(a) of the Act, if a financial product is not, or a financial service provided to a person does not relate to, a general insurance product, a superannuation product or an RSA, the financial product or financial service is provided to the person as a retail client unless the price for the provision of the financial product, or the value of the financial product to which the financial service relates, equals or exceeds the amount specified in regulations made for the purposes of that paragraph as being applicable in the circumstances.

Under paragraph 761G(10)(a) of the Act, the regulations may also deal with how a price or value referred to in that paragraph is to be calculated, either generally or in relation to a specified class of financial products.

In general, the ‘value’ of a product will be the amount that the product is worth once it is issued or acquired by the client. It is anticipated that the test for the value of the product in paragraph 761G(7)(a) of the Act will usually be used to assess a client’s status as a retail or wholesale client at or before the time that a financial service (eg financial product advice, disposal of the product) is provided to the client in respect of an existing product.

Value

For paragraph 761G(7)(a) of the Act, the amount applicable in relation to an investment-based financial product is $500 000.

Working out value: general rule

For paragraph 761G(10)(a) of the Act, the value of an investment-based financial product on a day is:

if the financial product is a security, or a financial product under paragraph 764A(1)(j) of the Act—the market value of the investment-based financial product; or

if paragraph (a) does not apply—the amount of money that stands to the client’s credit in relation to that investment-based financial product.

For subregulation (3), in calculating the value of an investment-based financial product:

disregard any amount standing to the client’s credit in relation to the investment-based financial product to the extent that it is to be paid, or was paid, out of money lent by:

the person offering the investment-based financial product; or

an associate of that person; and

disregard any amount of fees or charges:

that the product issuer has an actual or accrued right to deduct, or otherwise to have access to, from the value of the investment-based financial product (whether or not the amount has been deducted); or

that has accrued as at the time that the client’s status as a retail or wholesale client is assessed.

Cumulative value of products

If, at a single point in time:

a financial service that is being provided to a client is:

financial product advice; or

arranging for a person to engage in conduct in accordance with subsection 766C(2) of the Act; and

the financial service is provided in respect of:

more than 1 investment-based financial product; or

more than 1 income financial stream financial product; or

a combination of investment-based financial products and income financial stream financial products; and

either:

the total price for the provision of those financial products is at least $500 000; or

the price or value of all of those financial products is at least $500 000;

the value of the financial products is taken, for subregulation (3), to be greater than the amount mentioned in subregulation (2).

Subregulation (5) does not affect the operation of Part 7.9 of the Act, and Part 7.9 of these Regulations, to the extent that they require the provision of a Product Disclosure Statement in relation to the financial product advice.

Note: Although the effect of subregulation (5) is that the value of the investment-based financial products is taken to be at least $500 000 in the circumstances mentioned in that subregulation, a client must still be provided with appropriate product disclosure and other requirements in accordance with Part 7.9 of the Act as a retail client in relation to a particular investment-based financial product where the price of the product is less than $500 000.

In any situation in which a Product Disclosure Statement would be required for a retail client (the situations described in Subdivision B of Division 2 of Part 7.9 of the Act), the limit of $500 000 must be reached for any single investment-based financial product, or income stream financial product, before the client will be treated as a wholesale client.

Group products

If the investment-based financial product is a group product covered by subsection 1012H(1) of the Act:

the amount in subregulation (2) is to be used to determine the status of each person who elects, or may elect, to be covered by the investment-based financial product; and

subregulation (3) is to be used to determine the value of the investment-based financial product to the extent that it stands, or will stand, to the credit of, each person who elects, or may elect, to be covered by the investment-based financial product.

Time of assessment

If a financial services provider needs to assess the status of a client as either retail or wholesale at a particular time in order to ensure that the client complies with the Act, or for any related purpose, the value of a financial product may be assessed at any time, whether or not a financial service is being provided at that time in relation to that product.

Note: Subregulation (8) will ensure that a provider of financial services may assess a client’s status at any time (for example, the provider may need to ascertain whether a periodic statement must be sent to the client under section 1017D of the Act because the client is a retail client).

This regulation makes arrangements about the price for the provision of 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.

Note: Under paragraph 761G(7)(a) of the Act, if a financial product is not, or a financial service provided to a person does not relate to, a general insurance product, a superannuation product or an RSA, the financial product or financial service is provided to the person as a retail client unless the price for the provision of the financial product, or the value of the financial product to which the financial service relates, equals or exceeds the amount specified in regulations made for the purposes of that paragraph as being applicable in the circumstances.

Under paragraph 761G(10)(a) of the Act, the regulations may also deal with how a price or value referred to in that paragraph is to be calculated, either generally or in relation to a specified class of financial products.

In general, the ‘price’ of a product will be the amount that is paid to acquire or be issued with the financial product. The test for the price of the product in paragraph 761G(7)(a) of the Act will be determined at or before the time the client acquires, or is issued with, the financial product. If a client pays $500 000 or more to acquire or be issued with the financial product, the client will be a wholesale client in respect of the product.

Price

For paragraph 761G(7)(a) of the Act, the amount applicable in relation to the margin lending facility is $500 000.

Working out price

For paragraph 761G(10)(a) of the Act, the price of a margin lending facility is to be worked out so that it is the same as the value of the secured property or transferred securities contributed by the client for establishing the facility.

For paragraph 761G(10)(a) of the Act, the price of a margin lending facility whose limit is proposed to be increased is to be worked out so that it is the sum of:

the current value of any secured property or transferred securities previously contributed by a client for establishing the facility or increasing the limit; and

the value of any additional secured property or transferred securities contributed by the client in relation to the latest increase of the limit of the facility.

For subregulations (3) and (4), any secured property or transferred securities contributed by the client that is funded by borrowings from a third party is not to be taken into consideration when working out the price of a margin lending facility.

This regulation makes arrangements about the price for the provision of an income stream financial product.

Note: Under paragraph 761G(7)(a) of the Act, if a financial product is not, or a financial service provided to a person does not relate to, a general insurance product, a superannuation product or an RSA, the financial product or financial service is provided to the person as a retail client unless the price for the provision of the financial product, or the value of the financial product to which the financial service relates, equals or exceeds the amount specified in regulations made for the purposes of that paragraph as being applicable in the circumstances.

Under paragraph 761G(10)(a) of the Act, the regulations may also deal with how a price or value referred to in that paragraph is to be calculated, either generally or in relation to a specified class of financial products.

In general, the ‘price’ of a product will be the amount that is paid to acquire or be issued with the financial product. The test for the price of the product in paragraph 761G(7)(a) of the Act will be determined at or before the time the client acquires, or is issued with, the financial product. If a client pays over $500 000 to acquire or be issued with the financial product, the client will be a wholesale client in respect of the product.

Price

For paragraph 761G(7)(a) of the Act, the amount applicable in relation to an income stream financial product is $500 000.

Working out price: general rule

The price of an income stream financial product:

is the amount that is paid or payable to acquire or purchase the income stream financial product; and

does not include any amount paid for or in respect of the income stream financial product following its issue or acquisition unless the issue or acquisition would not have taken place without an arrangement to pay the amount.

Note: Additional amounts contributed to an allocated annuity will not generally be regarded as part of the ‘price’ paid to acquire or purchase the financial product.

For subregulation (3), in calculating any amount payable or paid to acquire or purchase the income stream financial product:

disregard any amount payable to the extent to which it is to be paid out of money lent by:

the person offering the income stream financial product; or

an associate of that person; and

disregard any amount paid to the extent to which it was paid out of money lent by:

the person offering the income stream financial product; or

an associate of that person; and

include any amount paid or payable to cover:

fees or charges that are paid to the issuer or any other person that relates to the issue of the income stream financial product; and

fees or charges that are paid to the issuer or any other person that relates to the issue of the income stream financial product; and

despite paragraph (c), disregard any amount of remuneration or other benefits paid or payable to a person for the provision of financial product advice or other related services provided directly to:

the client; or

another person acting on behalf of the client.

This regulation makes arrangements about the value of an income stream financial product.

Note: Under paragraph 761G(7)(a) of the Act, if a financial product is not, or a financial service provided to a person does not relate to, a general insurance product, a superannuation product or an RSA, the financial product or financial service is provided to the person as a retail client unless the price for the provision of the financial product, or the value of the financial product to which the financial service relates, equals or exceeds the amount specified in regulations made for the purposes of that paragraph as being applicable in the circumstances.

Under paragraph 761G(10)(a) of the Act, the regulations may also deal with how a price or value referred to in that paragraph is to be calculated, either generally or in relation to a specified class of financial products.

In general, the ‘value’ of a product will be the amount that the product is worth once it is issued or acquired by the client. It is anticipated that the test for the value of the product in paragraph 761G(7)(a) of the Act will usually be used to assess a client’s status as a retail or wholesale client at or before the time that a financial service (eg financial product advice, disposal of the product) is provided to the client in respect of an existing product.

Value

For paragraph 761G(7)(a) of the Act, the amount applicable in relation to an income stream financial product is $500 000.

Working out value: general rule

For paragraph 761G(10)(a) of the Act, the value of an income stream product is the amount worked out in accordance with any of the following paragraphs:

if the terms of the income stream financial product provide for the calculation of a commutation value—the commutation value;

if the terms of the income stream financial product do not permit commutation—the minimum commutation amount calculated in accordance with ordinarily accepted actuarial standards;

if the income stream financial product is of a kind in relation to which money stands to the client’s credit for the income stream financial product—the amount of money standing to the client’s credit.

For subregulation (3), in calculating the value of an income stream financial product:

disregard any amount standing to the client’s credit in relation to the income stream financial product to the extent that it is to be paid, or was to be paid, out of money lent by:

the person offering the income stream financial product; or

an associate of that person; and

disregard any amount of fees or charges:

that the product issuer has an actual or accrued right to deduct from the value of the income stream financial product (whether or not the amount has been deducted); or

that has accrued as at the time that the client’s status as a retail or wholesale client is assessed.

If it is not reasonably practicable to ascertain an amount in accordance with subregulation (3), the value of the income stream product is an amount calculated as follows:

identify the price for the provision of the income stream;

subtract the total of any amounts paid out of the income stream (including any regular payments and any capital amounts);

subtract an amount representing the reasonable administrative fees or other expenses of the issuer (including any costs or fees relating to the product that were disclosed to the client at or before the time the product was issued);

add interest on:

the amount paid for the income stream financial product; or

an amount, or a reasonable notional amount, representing the value of the income stream financial product;

based on movements in the rate of the All Groups Consumer Price Index number (being the weighted average of the 8 Australian capital cities) published by the Australian Statistician.

Group products

If the income stream financial product is a group product covered by subsection 1012H(1) of the Act:

the amount in subregulation (2) is to be used to determine the status of each person who elects, or may elect, to be covered by the income stream financial product; and

subregulation (3) is to be used to determine the value of the income stream financial product to the extent that it stands, or will stand, to the credit of, each person who elects, or may elect, to be covered by the income stream financial product.

Time of assessment

If a financial services provider needs to assess the status of a client as either retail or wholesale at a particular time in order to ensure that the client complies with the Act, or for any related purpose, the value of a financial product may be assessed at any time, whether or not a financial service is being provided at that time in relation to that product.

Note: Subregulation (7) will ensure that a provider of financial services may assess a client’s status at any time (for example, the provider may need to ascertain whether a periodic statement must be sent to the client under section 1017D of the Act because the client is a retail client).

This regulation makes arrangements about the value of a derivative:

that is a financial product; and

to which section 765A of the Act does not apply; and

to which regulation 7.1.22AA does not apply.

Note: Under paragraph 761G(7)(a) of the Act, if a financial product is not, or a financial service provided to a person does not relate to, a general insurance product, a superannuation product or an RSA, the financial product or financial service is provided to the person as a retail client unless the price for the provision of the financial product, or the value of the financial product to which the financial service relates, equals or exceeds the amount specified in regulations made for the purposes of that paragraph as being applicable in the circumstances.

Under paragraph 761G(10)(a) of the Act, the regulations may also deal with how a price or value referred to in that paragraph is to be calculated, either generally or in relation to a specified class of financial products.

Value

For paragraph 761G(7)(a) of the Act:

the amount applicable in relation to a single derivative is $500 000; and

if the derivative is included in 2 or more related financial products, the amount applicable in relation to the related financial products is $500 000.

Working out value: general rule

For paragraph 761G(10)(a) of the Act, the value of a derivative is the face value, or the notional amount in respect of, the financial product (in dollar terms) as at the date on which the relevant arrangement is entered into by the parties.

Time of assessment

If a financial services provider needs to assess the status of a client as either retail or wholesale at a particular time in order to ensure that the client complies with the Act, or for any related purpose, the value of a financial product may be assessed at any time, whether or not a financial service is being provided at that time in relation to that product.

Note: Subregulation (4) will ensure that a provider of financial services may assess a client’s status at any time (for example, the provider may need to ascertain whether ongoing disclosure of a significant event must be sent to the client under section 1017B of the Act because the client is a retail client).

This regulation makes arrangements about the value of a derivative that:

is a contract for difference; and

(b) is provided by a person who carries on a business of issuing contracts for difference to other persons (holders).

Paragraph 761G(7)(a) of the Act does not apply to the derivative.

In this regulation:

contract for difference means a derivative to which all of the following apply:

the value of the derivative, or the amount of consideration to be provided under the derivative, is ultimately determined, derived from or varies by reference to (wholly or in part) the change, between the acquisition and termination of the derivative, in the amount or value of an underlying specified under the terms of the derivative;

Note 1: For example, a derivative under which, at termination, the amount of consideration payable depends (wholly or in part) on the change in the level of a stock market index over the term of the derivative.

Note 2: There may be other factors that affect the value of the derivative. For example, fees and costs.

the derivative is not able to be traded on a licensed market;

the derivative:

does not terminate on a fixed date; or

if the derivative terminates on a fixed date—it is a derivative of a kind that are typically terminated before the fixed date;

Note 1: For example, the derivative may have a fixed termination date if the underlying has a fixed termination date.

Note 2: This means that options, futures, swaps and forward rate agreements will generally not be contracts for difference.

the holder has the right to terminate the derivative;

Note: The terms of the derivative may provide for its termination in other circumstances. For example, on the occurrence of an event of default or on the issuer (other than the holder) exercising a right to terminate the derivative.

on termination, the obligations of the parties are settled in cash or by set-off between the parties.

terminate, in relation to a derivative, includes the derivative being closed out.

underlying, in relation to a derivative, means any thing (of any nature whatsoever and whether or not deliverable) other than the derivative, including, for example, one or more of the following:

an asset;

a rate (including an interest rate or exchange rate);

an index;

a commodity.

This regulation makes arrangements about the value of a foreign exchange contract that is not a derivative.

Value

For paragraph 761G(7)(a) of the Act, the amount applicable to a foreign exchange contract is $500 000.

Working out value: general rule

For paragraph 761G(10)(a) of the Act, the value of a foreign exchange contract is the amount paid or payable under the foreign exchange contract.

This regulation makes arrangements about the price for the provision of a non-cash payment financial product.

Note: Under paragraph 761G(7)(a) of the Act, if a financial product is not, or a financial service provided to a person does not relate to, a general insurance product, a superannuation product or an RSA, the financial product or financial service is provided to the person as a retail client unless the price for the provision of the financial product, or the value of the financial product to which the financial service relates, equals or exceeds the amount specified in regulations made for the purposes of that paragraph as being applicable in the circumstances.

In general, the ‘price’ of a product will be the amount that is paid to acquire or be issued with the financial product. The test for the price of the product in paragraph 761G(7)(a) of the Act will be determined at or before the time the client acquires, or is issued with, the financial product. If a client pays over $500 000 to acquire or be issued with the financial product, the client will be a wholesale client in respect of the product.

Price

For paragraph 761G(7)(a) of the Act, the amount applicable in relation to a non-cash payment financial product is $500 000.

Working out price: general rule

The price of a non-cash payment financial product:

is the amount that is paid or payable to acquire or purchase the non-cash payment financial product; and

does not include any amount paid for or in respect of the non-cash payment financial product following its issue or acquisition unless the issue or acquisition would not have taken place without an arrangement to pay the amount.

Note: Additional amounts paid into a smart card or cheque account after its issue will not generally be regarded as part of the ‘price’ paid to acquire or purchase the financial product.

For subregulation (3), in calculating any amount payable or paid to acquire or purchase the non-cash payment financial product:

include any amount paid or payable to cover:

fees or charges that are paid to the issuer or any other person that relates to the issue of the non-cash payment financial product; and

fees or charges that are paid to the issuer or any other person that relates to the issue of the non-cash payment financial product; and

despite paragraph (a), disregard any amount of remuneration or other benefits paid or payable to a person for the provision of financial product advice or other related services provided directly to:

the client; or

another person acting on behalf of the client.

This regulation makes arrangements about the value of a non-cash payment financial product to which a financial service relates.

Note: Under paragraph 761G(7)(a) of the Act, if a financial product is not, or a financial service provided to a person does not relate to, a general insurance product, a superannuation product or an RSA, the financial product or financial service is provided to the person as a retail client unless the price for the provision of the financial product, or the value of the financial product to which the financial service relates, equals or exceeds the amount specified in regulations made for the purposes of that paragraph as being applicable in the circumstances.

In general, the ‘value’ of a product will be the amount that the product is worth once it is issued or acquired by the client. It is anticipated that the test for the value of the product in paragraph 761G(7)(a) of the Act will usually be used to assess a client’s status as a retail or wholesale client at or before the time that a financial service (eg financial product advice, disposal of the product) is provided to the client in respect of an existing product.

Value

For paragraph 761G(7)(a) of the Act, the amount applicable in relation to a non-cash payment financial product is $500 000.

Working out value: general rule

For paragraph 761G(10)(a) of the Act, the value of a non-cash payment financial product on a day is the amount of money that stands to the client’s credit in respect of that product.

For subregulation (3), in calculating an amount of money, disregard any amount of fees or charges:

that the product issuer has an actual or accrued right to deduct, or otherwise to have access to, from the value of the non-cash payment financial product (whether or not the amount has been deducted); or

that has accrued as at the time that the client’s status as a retail or wholesale client is assessed.

Time of assessment

If a financial services provider needs to assess the status of a client as either retail or wholesale at a particular time in order to ensure that the client complies with the Act, or for any related purpose, the value of a financial product may be assessed at any time, whether or not a financial service is being provided at that time in relation to that product.

Note: Subregulation (5) will ensure that a provider of financial services may assess a client’s status at any time (for example, the provider may need to ascertain whether ongoing disclosure of a significant event must be sent to the client under section 1017B of the Act because the client is a retail client).

This regulation makes arrangements about the value of a risk-based financial product.

Paragraph 761G(7)(a) of the Act does not apply to a risk-based financial product.

Note: Under paragraph 761G(7)(a) of the Act, if a financial product is not, or a financial service provided to a person does not relate to, a general insurance product, a superannuation product or an RSA, the financial product or financial service is provided to the person as a retail client unless the price for the provision of the financial product, or the value of the financial product to which the financial service relates, equals or exceeds the amount specified in regulations made for the purposes of that paragraph as being applicable in the circumstances.

Under paragraph 761G(10)(a) of the Act, the regulations may also deal with how a price or value referred to in that paragraph is to be calculated, either generally or in relation to a specified class of financial products.

Under paragraph 761G(10)(b) of the Act, the regulations may also modify the way in which paragraph 761G(7)(a) applies in particular circumstances.

For the purpose of assessing the price of a financial product, or the value of a financial product to which a financial service relates, under paragraph 761G(7)(a) of the Act, superannuation-sourced money is not to be counted if:

the financial service provided to a person is:

financial product advice; or

(ii) if the person was a retail client—the provision of a financial product in circumstances in which a Product Disclosure Statement would need to be given to the client under andPart 7.9 of the Act (including section 1012A, 1012B, 1012C or 1012IA);

the financial product to which the financial service relates is a product other than a non-cash payment financial product; and

the person who was the holder of the relevant superannuation interest in the regulated superannuation fund was or would have been a retail client under subsection 761G(6) of the Act if they had held or acquired the product after FSR commencement.

Example: If:

the price for an income stream financial product or an investment-based financial product is $700 000; and

the client uses $400 000 of superannuation-sourced money and $300 000 of other funds;

then, unless the client is a wholesale client for another reason, the client will be a retail client due to the operation of paragraph 761G(7)(a) of the Act.

Note: Under subsections 761G(5), (6) and (7) of the Act, general insurance products, superannuation products and RSAs are not financial products to which the restriction on counting superannuation-sourced money towards the price applies. This applies in addition to the exclusion for non-cash payment products under paragraph (b) of this regulation.

For subsection 761G(10) of the Act if, at any time, the holder of a financial product is a wholesale client in relation to the product because of paragraph 761G(7)(a) of the Act:

the holder is taken, on and after that time, to be a wholesale client in relation to the product as between the holder and:

the issuer of the product; or

if a related body corporate of the issuer of the product provides a custodial or depository service to the holder of the product in relation to the product—the related body corporate;

for the period during which the holder holds the product; and

paragraph (a) applies whether or not the holder would, but for that paragraph, have otherwise been or become a retail client in relation to that product at some time.

For subsection 761G(10) of the Act, if:

a person is a wholesale client in relation to the product because of paragraph 761G(7)(a) or paragraph (1)(a); and

another person becomes a holder of the financial product; and

the issuer did not know, and could not reasonably be expected to have known:

whether another person had become the holder of the financial product; or

whether any subsequent holder of the financial product was a retail client or a wholesale client;

the issuer is taken not to be guilty of any offence, or to be liable under civil penalty or civil liability provisions under the Act, merely because the issuer has not treated any subsequent holder of that financial product as a retail client.

For subparagraph 761G(7)(c)(i) of the Act, $2.5 million is specified.

For subparagraph 761G(7)(c)(ii) of the Act, $250 000 is specified.

Note: Under paragraph 761G(7)(c) of the Act, if a financial product is not, or a financial service provided to a person does not relate to, a general insurance product, a superannuation product or an RSA, the product or service is provided to the person as a retail client unless:

the client is a wholesale client under paragraph 761G(7)(a), (b) or (d) of the Act; or

the person who acquires the product or service gives the provider of the product or service, before the provision of the product or service, a copy of a certificate given within the preceding 6 months by a qualified accountant that states that the person:

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

has a 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 a year.

For paragraph 766A(1)(f) of the Act, the provision of financial product advice to an employer about the choice of a fund to which to contribute for the benefit of those employees for whom there is no chosen fund (within the meaning of the Superannuation Guarantee (Administration) Act 1992) is prescribed.

Note: The financial product advice provided to the employer is a financial service provided to a person as a retail client: see paragraph 761G(6)(b) of the Act.

For subsection 766A(1B) of the Act, a person who is one of the following:

a person who may request an annual information return under subregulation 5D.2.01(3);

a person who requests the preparation of a will, a trust instrument, a power of attorney or an agency arrangement;

is, in relation to an estate management function, prescribed as the person to whom the service is taken to be provided.

For paragraph 766A(2)(b) of the Act, a person who provides an eligible service is taken not to provide a financial service if:

the person provides the eligible service in the course of conducting an exempt service; and

it is reasonably necessary to provide the eligible service in order to conduct the exempt service; and

the eligible service is provided as an integral part of the exempt service.

(2) For this regulation, a person provides an eligible service if the person engages in conduct mentioned in paragraphs 766A(1)(a) to (f) of the Act.

(3) For this regulation, a person who does any of the following provides an exempt service:

provides advice in relation to the preparation or auditing of financial reports or audit reports;

provides advice on a risk that another person might be subject to and identifies generic financial products or generic classes of financial product that will mitigate that risk, other than advice for inclusion in an exempt document or statement;

provides advice on the acquisition or disposal, administration, due diligence, establishment, structuring or valuation of an incorporated or unincorporated entity, if the advice:

is given to a person who is, or is likely to become, an interested party in the entity; and

to the extent that it is financial product advice—is confined to advice on a decision about:

(A) securities of a body corporate, or related body corporate, that carries on or may carry on the business of the entity; or

(B) interests in a trust (other than a superannuation fund, a managed investment scheme that is registered or required to be registered under the trustee of which carries on or may carry on the business of the entity in the capacity of trustee; andPart 5C.1 of the Act, or a notified foreign passport fund),

does not relate to other financial products that the body corporate or the trustee of the trust may acquire or dispose of; and

is not advice for inclusion in an exempt document or statement;

provides advice on financial products that are:

securities in a company (other than securities that are to be offered under a disclosure document under Chapter 6D of the Act); or

interests in a trust (other than a superannuation fund, a managed investment scheme that is registered or required to be registered under Part 5C.1 of the Act, or a notified foreign passport fund);

if the company or trust is not carrying on a business and has not, at any time, carried on a business;

provides advice in relation to the transfer of financial products between associates;

arranges for another person to engage in conduct referred to in subsection 766C(1) in relation to interests in a self managed superannuation fund in the circumstances in paragraphs (5)(b) and (c);

arranges for another person to engage in conduct referred to in subsection 766C(1), by preparing a document of registration or transfer in order to complete administrative tasks on instructions from the person;

provides advice about the provision of financial products as security, other than where the security is provided for the acquisition of other financial products.

(3A) For this regulation, a person also provides an exempt service if the person:

is registered as an auditor under Part 9.2 of the Act; and

(b) performs any of the functions of a cover pool monitor mentioned in subsection 30(4) of the Banking Act 1959.

(4) For this regulation, a person also provides an exempt service if:

the person provides advice to another person on taxation issues including advice in relation to the taxation implications of financial products; and

the person will not receive a benefit (other than from the person advised or an associate of the person advised) as a result of the person advised acquiring a financial product mentioned in the advice, or a financial product that falls within a class of financial products mentioned in the advice; and

either:

the advice does not constitute financial product advice to a retail client; or

the advice constitutes financial product advice to a retail client and it includes, or is accompanied by, a written statement that:

(A) the person providing the advice is not licensed to provide financial product advice under the Act; and

(B) taxation is only one of the matters that must be considered when making a decision on a financial product; and

(C) the client should consider taking advice from the holder of an Australian Financial Services Licence before making a decision on a financial product.

(5) For this regulation, a person also provides an exempt service if:

the person provides advice in relation to the establishment, operation, structuring or valuation of a superannuation fund, other than advice for inclusion in an exempt document or statement; and

the person advised is, or is likely to become:

a trustee; or

a director of a trustee; or

an employer-sponsor; or

a person who controls the management;

of the superannuation fund; and

(c) except for advice that is given for the sole purpose, and only to the extent reasonably necessary for the purpose, of ensuring compliance by the person advised with the SIS Act (other than paragraph 52(2)(f)), the SIS Regulations (other than regulation 4.09) or the Superannuation Guarantee (Administration) Act 1992—the advice:

does not relate to the acquisition or disposal by the superannuation fund of specific financial products or classes of financial products; and

does not include a recommendation that a person acquire or dispose of a superannuation product; and

does not include a recommendation in relation to a person’s existing holding in a superannuation product to modify an investment strategy or a contribution level; and

if the advice constitutes financial product advice provided to a retail client—the advice includes, or is accompanied by, a written statement that:

the person providing the advice is not licensed to provide financial product advice under the Act; and

the client should consider taking advice from the holder of an Australian Financial Services Licence before making a decision on a financial product.

In this regulation:

exempt document or statement has the meaning given by subsection 766B(9) of the Act.

generic means without reference to a particular brand or product issuer.

interested party means:

an associate within the meaning of Division 2 of Part 1.2 of the Act; or

a manager; or

an officer; or

a trustee or director of a trustee.

For paragraph 766A(2)(b) of the Act, a circumstance in which a person is taken not to provide a financial service within the meaning of paragraph 766A(1)(a) of the Act is that:

the service provided by the person consists only of advising another person in relation to the manner in which:

voting rights attaching to securities; or

voting rights attaching to interests in managed investment schemes;

may or should be exercised; and

the advice is not intended to influence any decision in relation to financial products other than a decision about voting; and

the advice could not be reasonably be regarded as intended to influence a decision in relation to financial products, other than a decision about voting; and

the advice does not relate to a vote that relates to a dealing in financial products.

Note: A service that includes advice which is intended to influence the decision to acquire securities in another company would be not provided in circumstances covered by this regulation.

For paragraph 766A(2)(b) of the Act, a circumstance in which a person (person 1) is taken not to provide a financial service within the meaning of paragraph 766A(1)(a) of the Act is that:

person 1 provides a service to a person; and

the service consists only of passing on, publishing, distributing or otherwise disseminating a document that contains financial product advice; and

(c) the document was provided by another person (person 2); and

person 2 is not acting on behalf of person 1; and

person 1 is not the holder of a financial services licence that authorises person 1 to provide financial product advice; and

person 1 does not select the content of the document, modify the content of the document or otherwise exercise control over the content of the document; and

a reasonable person would not consider that person 1 provided, endorsed or otherwise assumed responsibility for the financial product advice contained in the document.

For paragraph 766A(2)(b) of the Act, a circumstance in which a person (person 1) is taken not to provide a financial service within the meaning of paragraph 766A(1)(a) of the Act is that:

person 1 provides advice to another person; and

the advice relates only to the structuring of remuneration packages for the other person’s employees.

For paragraph 766A(2)(b) of the Act, a circumstance in which a person is taken not to provide a financial service within the meaning of paragraph 766A(1)(a) of the Act is the provision of a service that consists only of a recommendation or statement of opinion provided to a person about the allocation of the person’s funds that are available for investment among 1 or more of the following:

shares;

debentures;

debentures, stocks or bonds issued, or proposed to be issued, by a government;

deposit products;

managed investment products;

foreign passport fund products;

investment life insurance products;

superannuation products;

other types of asset.

Note: This regulation does not apply to a recommendation or statement of opinion that relates to specific financial products or classes of financial products.

For paragraph 766A(2)(b) of the Act, this regulation applies in relation to the provision of a service by a person to another person in the following circumstances:

the service consists only of general advice in relation to a financial product or class of financial products;

the advice is prepared by a product issuer of the financial product or class of financial products who is not a financial services licensee;

the advice is provided by a financial services licensee whose financial services licence covers the provision of the advice.

The product issuer is taken not to provide a financial service within the meaning of paragraph 766A(1)(a) of the Act.

The financial services licensee is taken to provide a financial service within the meaning of paragraph 766A(1)(a) of the Act.

For paragraph 766A(2)(b) of the Act, a person is taken not to provide a financial service if:

the person makes a market for a financial product; and

the person is the issuer of the product; and

(c) the product is an investment-linked life insurance policy under an investment-linked contract (Life Insurance Act 1995).within the meaning of subsection 14(4) of the

For paragraph 766A(2)(b) of the Act, a person is taken not to provide a financial service if:

the person provides advice about a custodial or depository service; and

the advice is not about a financial product; and

the advice is not intended to influence, and could not reasonably be regarded as being intended to influence, a decision about a financial product other than a product that is a financial product only because it is an equitable right or interest in:

a share in a body; or

a debenture of a body; or

an interest in a registered scheme; or

an interest in a notified foreign passport fund.

Note: Paragraph (c) of this regulation refers to financial products described in paragraph 92(5)(c) of the Act and in subparagraphs 764A(1)(b)(ii) and (bb)(ii) of the Act.

For paragraph 766A(2)(b) of the Act, a person is taken not to provide a financial service if:

the service is:

arranging for the issue, or the acquisition, of a school banking product; or

the provision of general advice intended to influence a decision in relation to a school banking product; and

the person:

is employed by a school; or

provides the service on behalf of a school; and

the person does not receive any financial benefit for the provision of the service; and

the Product Disclosure Statement for the product discloses any commissions or other benefits that the school might receive in connection with the issue of the product.

In this regulation:

school banking product means a basic deposit product, issued by an ADI in the following circumstances:

it is offered for issue to pupils at a school;

there is no regular account keeping fee charged for the product.

For subsection 766A(2) of the Act, a person (the advisor) is taken not to provide a financial service if:

the advisor gives advice to another person; and

the advice:

is not about a particular financial product or an interest in a particular financial product; and

is not personal advice; and

the advice:

is not intended to influence the other person in making a decision in relation to a particular financial product or an interest in a particular financial product; or

could not reasonably be regarded as being intended to have such an influence; and

by giving the advice neither the advisor, nor an associate of the advisor, receives any remuneration (including commission) or other benefit that is related to the advice given apart from remuneration (including commission) or other benefit that the advisor or the associate would have received if the advice was not given.

For subsection 766A(2) of the Act, a financial product issuer is not taken to provide a financial service if:

the issuer gives advice to another person about:

a particular financial product or class of financial products issued by the issuer; or

an interest in a particular financial product or a class of financial products issued by the issuer; and

the advice is not personal advice; and

the advice is given to the person at the same time as the issuer:

advises the person that the issuer is not licensed to provide financial product advice in relation to the product, class or interest, as the case may be; and

recommends to the person that the person obtain a Product Disclosure Statement, if appropriate, and read it before making a decision to acquire the product or a product from the class of products, as the case may be; and

if it is advice about the offer, issue or sale of a financial product—notifies the person about the availability or otherwise of a cooling-off regime that applies in respect of the acquisition of the product, a product from the class of products or an interest in a product as the case may be (whether the regime is provided for by law or otherwise).

This regulation does not apply in relation to a margin lending facility.

For subsection 766C(7) of the Act, the following conduct does not constitute dealing in a financial product:

the enforcement of rights under a credit facility, including the enforcement of rights by a person acting under a power of attorney;

the disposal of a financial product that is subject to a mortgage or the transfer of such a product to the mortgagor, whether the disposal or transfer is carried out at the direction of the mortgagor or occurs as a result of the mortgagor fulfilling its obligations under the mortgage.

Example for paragraph (a): A mortgagee exercising a power of sale under a mortgage.

For subsection 766C(7) of the Act, conduct is not taken to be dealing in a financial product if:

the conduct is of a kind:

mentioned in paragraph 766C(1)(a), (d) or (e) of the Act; or

mentioned in paragraph 766C(1)(b) of the Act, where it is the issue of a beneficial interest in a financial product, that arises from conduct that would constitute providing a custodial or depository service but for the operation of regulation 7.1.40; and

(b) the conduct is carried out by a person (person 1) in relation to a product that person 1 holds on trust for, or on behalf of, another person (person 2) and the holding of that financial product would not constitute the provision of a custodial or depository service because of paragraphs 7.1.40(a), (b), (c), (d), (g) and (i).

Subregulation (1) does not apply to conduct carried out by person 1 in relation to a financial product that is held under a custodial arrangement as defined in section 1012IA of the Act unless:

person 2 is an associate of person 1; or

the financial product is held in the manner mentioned in paragraph 7.1.40(d).

For subsection 766C(7) of the Act, a financial service provided by a lawyer is taken not to be dealing in a financial product if:

the financial service consists of:

arranging for a person to engage in conduct referred to in subsection 766C(1) of the Act; or

dealing as an agent or otherwise on behalf of a client, an associate of a client or a relative of a client; and

the lawyer is acting:

on the instructions of the client, an associate of the client or a relative of the client; and

in his or her professional capacity; and

in the ordinary course of his or her activities as a lawyer; and

the financial service can reasonably be regarded as a necessary part of those activities; and

the lawyer has not received, and will not receive, a benefit in connection with those activities other than:

the payment of professional charges in relation to those activities; and

reimbursement for expenses incurred or payment on account of expenses to be incurred on behalf of the client, an associate of the client or a relative of the client;

from the client or from another person on behalf of the client.

For subsection 766C(7) of the Act, a financial service provided by a person is taken not to be dealing in a financial product if:

the financial product is a carbon unit, an Australian carbon credit unit or an eligible international emissions unit; and

the person is:

the Clean Energy Regulator; or

the Clean Development Mechanism Executive Board; or

the government of a country other than Australia; or

an authority acting on behalf of the government of a country other than Australia; and

the financial service consists of issuing the carbon unit, Australian carbon credit unit or eligible international emissions unit.

For subsection 766C(7) of the Act, a financial service provided by a person is taken not to be dealing in a financial product if:

the financial product is a carbon unit, an Australian carbon credit unit or an eligible international emissions unit; and

the financial service consists of dealing in the carbon unit, Australian carbon credit unit or eligible international emissions unit on behalf of:

a related body corporate of the person; or

an associated entity of the person; and

(c) the related body corporate or associated entity is an entity that is a liable entity entered in the information database under Clean Energy Act 2011.section 183 of the

For paragraph 766E(3)(e) of the Act, conduct that is mentioned in subsection 766E(1) of the Act does not constitute providing a custodial or depository service if:

the financial product held by the provider is a basic deposit product or is an account mentioned in subsection 981B(1) of the Act; or

the client is an associate of the provider (within the meaning of Division 2 of Part 1.2 of the Act); or

the provider and its associates have no more than 20 clients in aggregate for all custodial or depository services that they provide; or

the financial product is held as part of the arrangements for securing obligations under:

a credit facility; or

a debenture that is held as trustee under a trust deed:

(A) entered into under section 283AA of the Act or former section 260FA of the Corporations Law of a State or Territory; or

(B) mentioned in former section 1052 of the Corporations Law of a State or Territory; or

the provider is a participant in a licensed market and the financial product held is a derivative acquired on the licensed market by the provider on behalf of a client; or

the provider is a participant in a licensed clearing and settlement facility and the financial product held is a derivative registered on the licensed clearing and settlement facility by the provider on behalf of the client; or

the financial product is held under:

an order of a court; or

an order of a board or tribunal established under a law of a State or Territory; or

a direction by the holder of a statutory office established under a law of a State or Territory; or

the service is provided by a lawyer in the following circumstances:

the financial service consists of acquiring, holding or disposing of a cash management trust interest, being an interest to which a law of a State or Territory relating to the audit of trust or controlled monies applies;

the lawyer is acting:

(A) on instructions from the client, an associate of the client or a relative of the client; and

(B) in his or her professional capacity; and

(C) in the ordinary course of his or her activities as a lawyer;

the financial service can reasonably be regarded as a necessary part of those activities;

the lawyer has not received, and will not receive, a benefit in connection with the activities other than:

(A) the payment of professional charges related to those activities; and

(B) reimbursement for expenses incurred or payment on account of expenses to be incurred on behalf of the client, an associate of the client or a relative of the client;

from the client or from another person on behalf of the client; or

the financial product is held by a trustee appointed under:

a law of a State or Territory to administer monies awarded to a person as compensation; or

a trust formed for a charitable purpose.

For paragraph 766E(3)(e) of the Act, conduct that is mentioned in subsection 766E(1) of the Act does not constitute providing a custodial or depository service if the financial product is an Australian carbon credit unit that has been issued to:

(a) a special native title account in accordance with Carbon Credits (Carbon Farming Initiative) Act 2011; orsection 49 of the

a nominee account in accordance with section 141 of that Act.

For paragraph 767A(2)(a) of the Act, the following circumstances are specified as circumstances in which the conduct of a person making or accepting offers or invitations to acquire or dispose of financial products, on the person’s own behalf or on behalf of one party to the transaction only, constitutes the operating of a financial market:

(a) the Clean Energy Regulator making or accepting offers or invitations to acquire or dispose of carbon units on its own behalf, or on behalf of the Commonwealth only, in the course of conducting an auction of carbon units under the Clean Energy Act 2011;

(b) a person making or accepting offers or invitations to acquire or dispose of carbon units on behalf of the Clean Energy Regulator only, in the course of assisting the Clean Energy Regulator to conduct an auction of carbon units under the Clean Energy Act 2011.

For paragraph 792B(3)(b) of the Act, a matter to which that paragraph relates is any matter that, in the opinion of a market licensee, constitutes or may constitute a contravention of:

a condition of a licence held by a financial services licensee; or

Subdivision A or B of Division 2 of Part 7.8 of the Act; or

Division 3 of Part 7.8 of the Act; or

Subdivision B of Division 6 of Part 7.8 of the Act.

This regulation applies if a person becomes a director, secretary or senior manager of a market licensee or of a holding company of a market licensee (including when the person changes from one of those positions to another).

For subsection 792B(5) of the Act, the information to be given to ASIC by the market licensee is:

the person’s name and contact details; and

the date of appointment to the position; and

the person’s educational qualifications and financial market experience; and

if the market licensee is aware of any details of a conviction of the kind mentioned in subsection 206B(1) of the Act—the details; and

whether the market licensee knows whether the person:

is an undischarged bankrupt; or

has entered into a deed of arrangement or composition of a kind mentioned in subsections 206B(3) and (4) of the Act;

and, if the market licensee knows the information, details of what the market licensee knows.

For subsection 792B(5) of the Act, this regulation applies if a person ceases to be a director, secretary or senior manager of a market licensee or of a holding company of a market licensee (including when the person changes from one of those positions to another).

The information to be given to ASIC by the market licensee is:

the person’s name and contact details; and

the position that the person held; and

the date on which the person ceased to hold the position; and

if the person ceases to be a director, secretary or senior manager because the person is changing from the position to another in the company, the new position; and

if the reason for ceasing to hold the position is:

because of a contravention of the Corporations Act or another law of a State or Territory; or

because the person has become an undischarged bankrupt;

details of the reason.

This regulation applies if a market licensee becomes aware that a person has come to have, or has ceased to have, more than 15% of the voting power in the market licensee or in a holding company of the market licensee.

For subsection 792B(5) of the Act, the information to be given to ASIC by the market licensee is:

the person’s name and contact details; and

if known by the market licensee, the date on which the person came to have, or ceased to have, more than 15% of the voting power; and

if the market licensee knows the voting power that the person had immediately before the person came to have, or ceased to have, more than 15% of the voting power, that voting power; and

whether the market licensee knows the manner in which the person came to have, or ceased to have, more than 15% of the voting power, and, if the market licensee knows the manner, details of what the market licensee knows.

For subsection 792C(2) of the Act, the following information is prescribed:

a stock exchange automated trading system notification message;

an Australian Stock Exchange voiceline announcement.

In this regulation:

Australian Stock Exchange voiceline announcement means a message from the Australian Stock Exchange that is:

spoken over an announcement system; and

a summary of information lodged with the Australian Stock Exchange by a company or other entity that is included in the official list of a financial market.

Stock exchange automated trading system notification message means a brief message that is:

transmitted to computer terminals of persons linked to the Stock Exchange Automated Trading System; and

a summary of information lodged with the Australian Stock Exchange by a company or other entity that is included in the official list of a financial market.

For subsection 792F(2) of the Act, if an annual report by a market licensee does not contain any of the following information, the information must accompany the annual report:

a description of the activities the market licensee has undertaken in the financial year;

the resources (including financial, technological and human resources) that the market licensee had available, and used, in order to ensure that it has complied with its obligations in Chapter 7 of the Act, and, in particular, the obligation contained in subparagraph 792A(1)(c)(i) of the Act;

an analysis of the extent to which the market licensee considers that the activities undertaken, and resources used, have resulted in full compliance with all its obligations under Chapter 7 of the Act.

For subsection 793A(1) of the Act, the following matters are matters with which the operating rules of a licensed market must deal to the extent that a matter is not dealt with in the market integrity rules:

access to the licensed market, including the criteria for determining persons who are eligible to be participants;

ongoing requirements for participants, including:

the conduct of participants in relation to the licensed market with the objective of promoting honesty and fair practice; and

provision for the monitoring of participants’ compliance with the operating rules; and

provision for the expulsion or suspension of, or enforcement action against, a participant for breaches of the operating rules; and

provision for the expulsion or suspension of a participant for breaches of Chapter 7 of the Act, or regulations made under that Chapter; and

provision for the expulsion or suspension of, or enforcement action against, a participant for a failure or expected failure to meet the participant’s obligations under commitments entered into on the licensed market;

execution of orders;

the way in which disorderly trading conditions are to be dealt with, including disruptions to trading;

the class or classes of financial products that are to be dealt with on the licensed market by participants, including:

a description of the nature of each class of financial product; and

for a class of derivatives, if most of the terms of the arrangement constituting the derivative are determined in advance by the market operator (including price, if determined in advance):

(A) the standard terms of the arrangement that constitutes the derivative; and

(B) a description of the asset, rate, index, commodity or other thing that is used for the matters mentioned in paragraph 761D(1)(c) of the Act;

the terms of the contract formed between participants that enter into a transaction through the licensed market (to the extent to which paragraph (e) does not require that information);

if appropriate, the listing of entities, including:

admitting an entity to the official list of the licensed market for the purpose of enabling financial products of the entity to be traded on the licensed market, and removing an entity from the official list; and

the activities or conduct of an entity that is included on the official list of the licensed market, including a description of the arrangements for the disciplining of the entity for a breach of the operating rules;

mechanisms through which market-related disputes between participants may be settled (for example, arbitration arrangements);

the power to facilitate the assessment and, if appropriate, the investigation of market-related disputes between participants;

any obligations on participants and listed entities that are necessary to ensure that the market licensee is able to comply with subparagraph 792A(1)(c)(i) of the Act and regulations made under section 798E of the Act.

For subsection 793A(2) of the Act, the following matters are matters in respect of which a licensed market must have written procedures to the extent that the market integrity rules do not deal with a matter:

exchange of appropriate information with:

clearing and settlement facilities; and

other financial markets; and

ASIC;

arrangements to ensure the integrity and security of systems (including computer systems);

arrangements for the monitoring of compliance by participants and listed entities with the operating rules of the licensed market:

the assessment, investigation (if justified) and settlement of market-related disputes between participants;

the recording and effective disclosure of transactions;

the provision of information about market processes.

For paragraph 794C(5)(d) of the Act, the following agencies are prescribed:

the Clean Energy Regulator;

the Australian Competition and Consumer Commission;

the Australian Prudential Regulation Authority;

the Australian Taxation Office;

the Australian Transaction Reports and Analysis Centre;

an authority of a State or Territory having functions and powers similar to those of the Director of Public Prosecutions;

the police force or service of each State and the Northern Territory;

the Department of Consumer and Employment Protection of Western Australia;

the Commissioner of State Revenue of Western Australia;

the Department of Fair Trading of New South Wales;

the Office of Fair Trading and Business Affairs of Victoria;

the State Revenue Office of Victoria;

the Office of Consumer Affairs of Queensland;

the Office of State Revenue of Queensland;

the Office of Consumer and Business Affairs of South Australia;

the Office of Consumer Affairs and Fair Trading of Tasmania;

the Department of Treasury and Finance of Tasmania;

the Consumer Affairs Bureau of the Australian Capital Territory;

the Fair Trading Group of the Northern Territory.

This Division applies in relation to a body corporate that applies for an Australian market licence that may be granted under subsection 795B(1) of the Act.

For paragraph 795A(1)(a) of the Act, the following information is required as part of an application by the body corporate for an Australian market licence:

the body corporate’s name, address and contact details;

the name, address and contact details of any person who will act on behalf of the body corporate in relation to the application;

details of the body corporate’s major shareholders and organisation, including:

the name, address and contact details of each director; and

the name, address and contact details of each secretary; and

the name, address and contact details of each senior manager of the body corporate; and

whether any director, secretary or senior manager is, or has been, disqualified from managing a corporation under a law of this jurisdiction or another jurisdiction;

a description of the body corporate’s business or functions, other than the operation of the proposed market;

details of the financial products to be traded on the proposed market;

whether the proposed market will involve the provision of a financial product to a person as a retail client;

details of the clearing and settlement arrangements that have been made, or are proposed, for the proposed market;

details of the technological resources that will be used in the operation of the market, including details of:

the purpose of the resources; and

how the resources are to be supplied, managed, maintained and upgraded; and

how the security of information technology systems is to be protected;

details of the arrangements for dealing with conflicts between the body corporate’s commercial interests and its obligations to supervise and monitor the market;

details of the arrangements for the supervision of employees of the body corporate who have duties and responsibilities of a kind that supervision of the employees is necessary to protect the integrity of the operation of the proposed market;

if the ACCC has made a decision in relation to the market that the body corporate will operate—details of the decision.

For paragraph 795A(1)(b) of the Act, the following documents are required as part of an application by the body corporate for an Australian market licence:

the body corporate’s current or proposed operating rules and written procedures;

if applicable—the body corporate’s constitution;

a copy of any agreement material to:

the way in which the proposed market is to be operated; and

the way in which the financing of the proposed market, and the other resources used to operate it, will be organised; and

the body corporate’s constitution or governance; and

the appointment or employment of directors, secretaries and senior managers of the body corporate;

a copy of any agreement, or proposed agreement, relating to the outsourcing or delegation of a function, facility or service in relation to the proposed market by the body corporate to another person;

if the body corporate is a disclosing entity—a copy of each half-year financial report of the body corporate for:

the period of 3 years immediately before the application was made; or

the shorter period in which the body corporate has carried on a business;

if the body corporate is not a disclosing entity—a copy of each annual financial report of the body corporate for:

the period of 3 years immediately before the application was made; or

the shorter period in which the body corporate has carried on a business;

if the body corporate is a related body corporate—a copy of the relevant consolidated annual and half-year financial reports for:

the period of 3 years immediately before the application was made; or

the shorter period in which the body corporate has carried on a business;

a report, by a qualified person who is independent of the body corporate, about the anticipated financial resource requirements of the proposed market, including details of:

the total anticipated fixed expenditure and variable expenditure for the first 12 months of operation of the market; and

the total anticipated revenue for the first 12 months of operation of the market and other sources of financial resources; and

the body corporate’s contingency arrangements in the event of circumstances occurring that affect the body corporate’s ability to operate the market;

details of the body corporate’s business plan, or other strategic planning, for the first 12 months of operation of the market, that are not included in the other documents mentioned in this regulation.

This Division applies in relation to a body corporate that applies for an Australian market licence that may be granted under subsection 795B(2) of the Act.

For paragraph 795A(1)(a) of the Act, the following information is required as part of an application by the body corporate for an Australian market licence:

the body corporate’s name, address and contact details in this jurisdiction;

(b) the address and contact details of the body corporate’s principal place of business in the foreign country in which its financial market is located (the home country);

whether the body corporate is registered under Division 2 of Part 5B.2 of the Act;

details of the financial products that are traded on the financial market in the home country;

details of the clearing and settlement arrangements for the financial market in the home country;

details of the body corporate’s major shareholders and organisation, including any details that have not already been given to ASIC in accordance with Division 2 of Part 5B.2 of the Act of:

each person whose duties are comparable to those of a director; and

each person whose duties are comparable to those of a secretary; and

each person whose duties are comparable to those of an senior manager of the body corporate.

For paragraph 795A(1)(b) of the Act, the documents required as part of an application by the body corporate for an Australian market licence are:

the body corporate’s authorisation to operate the financial market in its home country, including a copy of any conditions imposed on the body corporate’s operation of its financial market in the home country; and

sufficient documentation to allow the Minister to be satisfied that the regulation of the financial market in its home country is equivalent to regulation under the Act.

Example for paragraph (b): Copies of the relevant legislation, rules and procedures in the home country.

For subsection 798E(1) of the Act, this regulation applies in relation to specific and significant conflicts, or potential conflicts that would be specific and significant, between:

(a) the commercial interests of Australian Stock Exchange Limited (ASX) in dealing with a body (the competitor) that operates a business with which:

ASX is in competition; or

a subsidiary of ASX is in competition; or

a joint venture (however described) to which ASX is a party is in competition; or

a joint venture (however described) to which a subsidiary of ASX is a party is in competition; and

the need for ASX to ensure that the market operated by it operates in the way mentioned in paragraph 792A(1)(a) of the Act.

The competitor may lodge with ASIC in the prescribed form, an application for ASIC to decide that ASIC, instead of ASX, will make decisions and take action (or require ASX to take action on ASIC’s behalf) in relation to:

if the competitor is seeking to be listed—the compliance by the competitor with the applicable listing rules of the market operated by ASX; or

if the competitor is listed on the market operated by ASX—the compliance by the competitor with the applicable listing rules of the market operated by ASX.

As soon as practicable after receiving an application under subregulation (2), ASIC must:

consider whether a conflict, or potential conflict, exists as described in subregulation (1); and

if it considers that a conflict, or potential conflict, exists—consider whether, having regard to ASX’s obligations under subparagraph 792A(1)(c)(i) of the Act, the conflict, or potential conflict, would be dealt with more appropriately and efficiently by a means other than taking the action mentioned in subregulation (2); and

decide whether (and to what extent):

to make decisions and take action; or

to require ASX to take action on ASIC’s behalf;

in relation to the matters mentioned in paragraphs (2)(a) and (b).

If ASIC decides to make decisions and take action (or to require ASX to take action on ASIC’s behalf) as mentioned in subregulation (2), ASIC:

may consult with ASX and the competitor to identify the listing rules of the market operated by ASX for which ASIC needs to make the decisions and take the action; and

must, as soon as practicable, decide the extent of ASIC’s role, having regard to:

the rationale for the listing rules of the market operated by ASX; and

the desirability of treating the competitor consistently with other entities listed, or seeking to be listed, on that market; and

the extent to which action taken by ASIC is severable from the wider supervision of the competitor’s compliance with the listing rules; and

its consultations (if any) with the competitor and ASX.

ASIC must, as soon as practicable, advise ASX and the competitor, in writing, of decisions under paragraphs (3)(c) and (4)(b).

If ASIC decides to make decisions and take action (or to require ASX to take action on ASIC’s behalf) as mentioned in subregulation (2):

the decisions made and actions taken have effect despite anything in the listing rules of the market operated by ASX; and

decisions made and actions taken by ASIC (or action taken by ASX on ASIC’s behalf) have effect as if they were decisions made and actions taken under the listing rules.

Note 1: It is expected that the listing rules of the market will support ASIC’s power to take a supervisory role in relation to compliance with some or all of the listing rules.

Note 2: Under Australian Securities and Investments Commission Act 2001, ASIC is not liable to an action or other proceeding for damages for or in relation to an act done or omitted in good faith in performance or purported performance of any function, or in exercise or purported exercise of any power, conferred or expressed to be conferred by or under the corporations legislation.section 246 of the

Note 3: The powers available to ASIC include the power:

to grant, or not to grant, waivers of the listing rules; and

to impose conditions on which the grant of a waiver is made.

If ASIC believes, on reasonable grounds, that:

the period during which decisions will be made and action will be taken in a particular case is likely to be more than 3 months; and

the decisions and actions likely to be required are not adequately reflected in the listing rules of the market operated by ASX;

ASIC must notify ASX, in writing, of its belief.

ASX must, as soon as practicable after being notified under subregulation (7), amend the listing rules of the market operated by ASX to the extent necessary to meet ASIC’s concerns.

Note: Amendments of the listing rules are subject to procedural requirements, including possible disallowance, mentioned in sections 793D and 793E of the Act.

If ASIC decides that it is no longer necessary for decisions to be made and action to be taken in relation to the particular conflict or potential conflict, ASIC must notify ASX and the competitor of its decision as soon as practicable.

ASX may repeal any listing rule or amendment made for subregulation (8) only if:

the repeal or amendment is necessary or convenient to meet ASIC’s concerns more effectively; or

ASIC has notified ASX under subregulation (9).

Paragraph (10)(b) does not prevent ASIC from:

reviewing a particular conflict or potential conflict; and

deciding, at any time (with or without complying with paragraph (4)(a)), that it has again become necessary for ASIC to make decisions and take action (or for ASIC to require ASX to take action on ASIC’s behalf) in relation to the conflict or potential conflict.

If ASIC makes the decision mentioned in paragraph (11)(b), ASIC must notify ASX and the competitor of its decision as soon as practicable.

For this regulation, ASX must:

give ASIC the information and documentation that ASIC reasonably needs to make decisions and take action under this regulation; and

establish administrative and procedural arrangements for that purpose.

A competitor may notify ASIC that the competitor no longer wishes ASIC to make decisions and take action (or for ASIC to require ASX to take action on ASIC’s behalf) in relation to the conflict or potential conflict.

If ASIC is notified under subregulation (14), ASIC must, as soon as practicable:

decide whether it will cease to make the decisions and take the action (or cease to require ASX to take action on ASIC’s behalf); and

notify ASX and the competitor of its decision.

If ASIC decides to cease to make decisions and take action (or to cease to require ASX to take action on ASIC’s behalf), ASIC must cease to make decisions and take action (or must cease to require ASX to take action on ASIC’s behalf) in relation to the conflict or potential conflict.

If ASIC decides not to cease to make decisions and take action (or not to cease to require ASX to take action on ASIC’s behalf), ASIC must continue to make decisions and take action (or must require ASX to take action on ASIC’s behalf) in relation to the conflict or potential conflict.

For paragraph 798K(1)(d) of the Act, ASIC may accept a written undertaking, entered into by a person who is alleged to have contravened subsection 798H(1) of the Act, as an alternative to civil proceedings.

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

an undertaking to take specified action within a specified period;

an undertaking to refrain from taking specified action;

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 an infringement notice given under Division 7.2A.2 in relation to the alleged contravention. For example, an infringement notice may require a person to enter into an undertaking; a person may enter into an undertaking to comply with an infringement notice; a person may enter into an undertaking if the person does not comply with an infringement notice or the infringement notice is withdrawn.

If ASIC agrees, in writing, to the withdrawal or variation of the undertaking, the person who entered into the undertaking may withdraw or vary the undertaking.

If ASIC is satisfied that the person who entered into the undertaking has breached a term of the undertaking, ASIC may apply to a Court for an order under subregulation (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:

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

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;

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

any other order that the Court considers appropriate.

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 of subsection 798H(1) of the Act.

For subsection 798K(1) of the Act, the purpose of this Division is to set out a scheme under which a person who is alleged to have contravened subsection 798H(1) of the Act may do one or more of the following as an alternative to civil proceedings:

pay a penalty to the Commonwealth;

undertake or institute remedial measures (including education programs);

accept sanctions other than the payment of a penalty to the Commonwealth (including public censure, suspension for no more than six months from performing certain financial services in relation to a licensed market, or disgorgement of profits);

enter into an undertaking under regulation 7.2A.01, including an undertaking to do an action mentioned in paragraph (a), (b) or (c).

This Division does not require ASIC to give an infringement notice to a person in relation to the alleged contravention of subsection 798H(1) of the Act.

This Division does not affect the liability of a person to civil proceedings if ASIC does not give an infringement notice to the person in relation to the alleged contravention of subsection 798H(1) of the Act.

This Division does not affect the liability of a person to civil proceedings if:

ASIC gives an infringement notice to the person in relation to the alleged contravention of subsection 798H(1) of the Act; and

either:

the notice is withdrawn; or

the person does not comply with the notice in accordance with regulation 7.2A.08.

This Division does not limit or otherwise affect the penalty that a Court could impose on the person for a contravention of subsection 798H(1) of the Act.

In this Division:

compliance period has the meaning given by subregulation 7.2A.08(2).

infringement notice means an infringement notice given under regulation 7.2A.04.

recipient means the person to whom ASIC gives the infringement notice or intends to give the infringement notice under regulation 7.2A.04.

If ASIC has reasonable grounds to believe that a person has contravened subsection 798H(1) of the Act, ASIC may give to the person an infringement notice in relation to the alleged contravention.

ASIC may give a person an infringement notice that is in relation to more than one alleged contravention of subsection 798H(1) of the Act.

If ASIC withdraws an infringement notice given to a person in relation to the alleged contravention of subsection 798H(1) of the Act, ASIC may give the person a new infringement notice in relation to the alleged contravention.

Example for subregulation (3): An infringement notice given to a person in relation to an alleged contravention of subsection 798H(1) of the Act 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.

Before giving a recipient an infringement notice, ASIC must:

give the recipient a written statement that sets out ASIC’s reasons for believing that the recipient has contravened subsection 798H(1) of the Act; and

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

appear at a private hearing before ASIC; and

give evidence to ASIC; and

make submissions to ASIC;

in relation to the alleged contravention of subsection 798H(1) of the Act.

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 subsection 798H(1) of the Act, 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.

An infringement notice:

must state the date on which it is given; and

must be identified by a unique code; and

must state the name and address of the recipient; and

must state that it is being given by ASIC under regulation 7.2A.04; and

must specify details of each alleged contravention of subsection 798H(1) of the Act to which the infringement notice relates, including:

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

each market integrity rule that ASIC alleges the recipient has contravened; and

must, in relation to each market integrity rule that ASIC alleges the recipient has contravened, state the maximum pecuniary penalty that a Court could order the recipient to pay for contravening the market integrity rule; and

must, in relation to each alleged contravention of subsection 798H(1) of the Act to which the infringement notice relates:

specify the penalty (if any) payable for each alleged contravention of subsection 798H(1) of the Act; and

if subparagraph (i) applies:

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

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

(C) explain how payment of the penalty can be made; and

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

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

specify the terms of an undertaking (if any) that the recipient must enter into under regulation 7.2A.01; and

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

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

must state that the recipient may apply to ASIC:

for withdrawal of the notice under regulation 7.2A.11; and

for an extension of time under regulation 7.2A.09; and

must state that ASIC may publish details of the infringement notice under regulation 7.2A.15; and

may include any other information that ASIC considers necessary.

Note: For sub-subparagraph (g)(ii)(A), the total penalty is the sum of the penalties payable under subparagraph (g)(i).

The penalty payable (if any) for an alleged contravention of subsection 798H(1) of the Act is the amount determined by ASIC.

Note: See subsection 798K(2) of the Act for the maximum penalty payable.

If an infringement notice is in relation to more than one alleged contravention of subsection 798H(1) of the Act, the total penalty payable under the infringement notice is the sum of the penalties payable (if any) for the alleged contraventions.

A recipient complies with an infringement notice if, during the compliance period, the recipient does all of the following:

pays the penalty specified in the infringement notice under sub-subparagraph 7.2A.06(g)(ii)(A) (if any);

undertakes or institutes the remedial measures specified in the infringement notice under subparagraph 7.2A.06(g)(iii) (if any);

accepts the sanctions specified in the infringement notice under subparagraph 7.2A.06(g)(iv) (if any);

enters into an undertaking (including an undertaking to comply with the infringement notice) with the terms specified in the infringement notice under subparagraph 7.2A.06(g)(v) (if any).

(2) The compliance period for an infringement notice:

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

ends:

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

on another day permitted by this regulation.

If the recipient applies for a further period of time in which to comply with the infringement notice, and the application is granted, the compliance period ends at the end of the further period allowed.

If the recipient applies for a further period of time in which to comply with the infringement notice, and the application is refused, the compliance period ends on the later of:

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

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

If the recipient applies for the infringement notice to be withdrawn, and the application is refused, the compliance period ends 28 days after the notice of refusal is given to the recipient.

During the compliance 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 infringement notice.

The application must:

specify the infringement notice’s unique identification code; and

set out the reasons for the application.

Within 14 days after receiving the application, ASIC must:

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

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

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 infringement notice.

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

Subject to subregulation (3), if:

an infringement notice is given to a recipient in relation to an alleged contravention of subsection 798H(1) of the Act; and

the infringement notice is not withdrawn; and

the recipient complies with the infringement notice;

the effects in subregulation (2) apply.

The effects are:

any liability of the recipient to the Commonwealth for the alleged contravention of subsection 798H(1) of the Act is discharged; and

no civil or criminal proceedings may be brought or continued by the Commonwealth against the recipient for the conduct specified in the infringement notice as being the conduct that made up the alleged contravention of subsection 798H(1) of the Act; and

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 subsection 798H(1) of the Act; and

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

the recipient is not taken to have contravened subsection 798H(1) of the Act.

Note: Third parties are not prevented from commencing civil proceedings against the recipient, including under sections 793C and 1101B of the Act, and under section 1317J of the Act in relation to sections 1317G and 1317HB of the Act. ASIC is not prevented from applying for an order on behalf of a plaintiff in accordance with the Act.

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

provided false or misleading information to ASIC; or

withheld evidence or information from ASIC;

in relation to the alleged contravention of subsection 798H(1) of the Act.

During the compliance period, a recipient of an infringement notice may apply, in writing, to ASIC for the infringement notice to be withdrawn.

The application must:

specify the infringement notice’s unique identification code; and

set out the reasons for the application.

Within 14 days after receiving the application, ASIC must:

withdraw or refuse to withdraw the infringement notice; and

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

Without limiting subregulation (3), ASIC may withdraw the infringement notice after taking into account the following matters:

whether the recipient has previously been found to have contravened subsection 798H(1) of the Act;

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

whether an infringement notice has previously been given to the recipient in relation to an alleged contravention of subsection 798H(1) of the Act, and whether the recipient complied with the infringement notice;

any other relevant matter.

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

If ASIC has not withdrawn, or refused to withdraw, the infringement notice within 14 days after receiving the application, ASIC is taken to have refused to withdraw the infringement notice.

ASIC may withdraw an infringement notice given by ASIC without an application under regulation 7.2A.11 having been made.

Without limiting subregulation (1), ASIC may withdraw the infringement notice after taking into account a matter mentioned in paragraph 7.2A.11(4)(a), (b), (c) or (d).

A notice withdrawing an infringement notice must include the following information:

the name and address of the recipient;

the date the infringement notice was given;

the infringement notice’s unique identification code.

The notice must also state that the infringement notice is withdrawn.

ASIC may withdraw an infringement notice after the recipient has complied with the infringement notice only if the recipient agrees, in writing, to the withdrawal.

If an 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.

If an infringement notice is withdrawn after the recipient has complied with a requirement specified in the infringement notice:

to undertake or institute remedial measures; or

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

to enter into an undertaking;

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

If ASIC gives an infringement notice to a recipient, ASIC may, at the end of the compliance period, publish details of the infringement notice.

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

(3) ASIC may publish details of an infringement notice by publishing in the Gazette:

a copy of the infringement notice; and

the following statements:

a statement as to whether the recipient has complied with the infringement notice;

if the recipient has complied with the infringement notice, a statement that:

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

(B) the recipient is not taken to have contravened subsection 798H(1) of the Act;

if the recipient has not complied with the infringement notice, a statement that:

(A) the giving of an infringement notice to a recipient is only an allegation that the recipient has contravened subsection 798H(1) of the Act; and

(B) the recipient is not taken to have contravened subsection 798H(1) of the Act.

ASIC may publish details of an infringement notice by issuing a written or oral statement that:

includes an accurate summary of the details of the infringement notice, including:

the name of the recipient; and

the amount of the penalty specified in the infringement notice (if any); and

the remedial measures specified in the infringement notice (if any); and

the sanctions specified in the infringement notice (if any); and

the terms of an undertaking specified in the infringement notice (if any); and

the conduct specified in the infringement notice as being the conduct that made up the alleged contravention of subsection 798H(1) of the Act; and

includes the following statements:

a statement as to whether the recipient has complied with the infringement notice;

if the recipient has complied with the infringement notice, a statement that:

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

(B) the recipient is not taken to have contravened subsection 798H(1) of the Act;

if the recipient has not complied with the infringement notice, a statement that:

(A) the giving of an infringement notice to a recipient is only an allegation that the recipient has contravened subsection 798H(1) of the Act; and

(B) the recipient is not taken to have contravened subsection 798H(1) of the Act.

This regulation applies if a person becomes a director, secretary or senior manager of a market licensee or of a holding company of a CS facility licensee (including when the person changes from one of those positions to another).

For subsection 821B(4) of the Act, the information to be given to ASIC by the CS facility licensee is:

the person’s name and contact details; and

the date of appointment to the position; and

the person’s educational qualifications and financial market experience; and

if the CS facility licensee is aware of any details of a conviction of the kind mentioned in subsection 206B(1) of the Act—the details; and

whether the CS facility licensee knows whether the person:

is an undischarged bankrupt; or

has entered into a deed of arrangement or composition of a kind mentioned in subsections 206B(3) and (4) of the Act;

and, if the CS facility licensee knows the information, details of what the CS facility licensee knows.

This regulation applies if a person ceases to be a director, secretary or senior manager of a CS facility licensee or of a holding company of a CS facility licensee (including when the person changes from one of those positions to another).

For subsection 821B(4) of the Act, the information to be given to ASIC by the CS facility licensee is:

the name and contact details of the person; and

the position that the person held; and

the date on which the person ceased to hold the position; and

if the person ceases to be a director, secretary or senior manager because the person is changing from the position to another in the company, the new position; and

if the reason for ceasing to hold the position is:

because of a contravention of the Corporations Act or another law of a State or Territory; or

because the person has become an undischarged bankrupt;

details of the reason.

This regulation applies if a CS facility licensee becomes aware that a person has come to have, or has ceased to have, more than 15% of the voting power in the CS facility licensee or in a holding company of the CS facility licensee.

For subsection 821B(4) of the Act, the information to be given to ASIC by the CS facility licensee is:

the person’s name and contact details; and

if known by the CS facility licensee, the date on which the person came to have, or ceased to have, more than 15% of the voting power; and

if the CS facility licensee knows the voting power that the person had immediately before the person came to have, or ceased to have, more than 15% of the voting power, that voting power; and

whether the CS facility licensee knows the manner in which the person came to have, or ceased to have, more than 15% of the voting power, and, if the CS facility licensee knows the manner, details of what the CS facility licensee knows.

For subsection 821E(2) of the Act, if an annual report by a CS facility licensee does not contain any of the following information, the information must accompany the annual report:

a description of the activities the CS facility licensee has undertaken in the financial year;

the resources (including financial, technological and human resources) that the CS facility licensee had available, and used, in order to ensure that it has complied with its obligations in Chapter 7 of the Act, and, in particular, the obligation contained in subparagraph 821A(1)(c)(i) of the Act;

an analysis of the extent to which the CS facility licensee considers that the activities undertaken, and resources used, have resulted in full compliance with all its obligations under Chapter 7 of the Act.

For subsection 822A(1) of the Act, the following matters are matters with which the operating rules of a licensed CS facility must deal:

the regulated services provided by the licensed CS facility, including the means by which obligations of parties to transactions relating to financial products will be met through the licensed CS facility;

matters relating to risk in the licensed CS facility;

access to the licensed CS facility, including the criteria for determining persons who are eligible to be participants and the ongoing requirements for participants;

suspension and expulsion of participants from the licensed CS facility;

disciplinary action against participants;

procedures, to be followed by participants, to address risks that are relevant to the licensed CS facility;

requirements to facilitate the monitoring of compliance by participants with the operating rules of the licensed CS facility;

the handling of defaults;

any obligations on participants and issuers that are necessary to ensure that the CS facility licensee is able to comply with subparagraph 821A(1)(c)(i) of the Act;

if the licensed CS facility is a prescribed CS facility—arrangements for the transfer of financial products that are likely to be transferred using the licensed CS facility.

For subsection 822A(2) of the Act, the following matters are matters in respect of which a licensed CS facility must have written procedures:

arrangements to ensure the integrity and security of systems (including computer systems);

identifying and monitoring risks that are relevant to the licensed CS facility;

the development of rules and procedures to address those risks;

exchange of appropriate information with:

other clearing and settlement facilities; and

financial markets; and

ASIC and the Reserve Bank of Australia;

relating to participants and their activities that are relevant to the licensed CS facility;

the provision of information about the procedures of the licensed CS facility, including rights, obligations and risks relating to the facility;

arrangements for supervising the licensed CS facility, including the monitoring of compliance by participants and issuers with the operating rules of the licensed CS facility.

For paragraph 823C(5)(d) of the Act, the following agencies are prescribed:

the Clean Energy Regulator;

the Australian Competition and Consumer Commission;

the Australian Prudential Regulation Authority;

the Australian Taxation Office;

the Australian Transaction Reports and Analysis Centre;

an authority of a State or Territory having functions and powers similar to those of the Director of Public Prosecutions;

the police force or service of each State and the Northern Territory;

the Department of Consumer and Employment Protection of Western Australia;

the Commissioner of State Revenue of Western Australia;

the Department of Fair Trading of New South Wales;

the Office of Fair Trading and Business Affairs of Victoria;

the State Revenue Office of Victoria;

the Office of Consumer Affairs of Queensland;

the Office of State Revenue of Queensland;

the Office of Consumer and Business Affairs of South Australia;

the Office of Consumer Affairs and Fair Trading of Tasmania;

the Department of Treasury and Finance of Tasmania;

the Consumer Affairs Bureau of the Australian Capital Territory;

the Fair Trading Group of the Northern Territory.

For paragraph 823CA(4)(d) of the Act, the following agencies are prescribed:

the Clean Energy Regulator;

the Australian Competition and Consumer Commission;

the Australian Prudential Regulation Authority;

the Australian Taxation Office;

the Australian Transaction Reports and Analysis Centre;

an authority of a State or Territory having functions and powers similar to those of the Director of Public Prosecutions;

the police force or service of each State and the Northern Territory;

the Department of Consumer and Employment Protection of Western Australia;

the Commissioner of State Revenue of Western Australia;

the Department of Fair Trading of New South Wales;

the Office of Fair Trading and Business Affairs of Victoria;

the State Revenue Office of Victoria;

the Office of Consumer Affairs of Queensland;

the Office of State Revenue of Queensland;

the Office of Consumer and Business Affairs of South Australia;

the Office of Consumer Affairs and Fair Trading of Tasmania;

the Department of Treasury and Finance of Tasmania;

the Consumer Affairs Bureau of the Australian Capital Territory;

the Fair Trading Group of the Northern Territory.

This Division applies in relation to a body corporate that applies for an Australian CS facility licence that may be granted under subsection 824B(1) of the Act.

For paragraph 824A(1)(a) of the Act, the following information is required as part of an application by the body corporate for an Australian CS facility licence:

the body corporate’s name, address and contact details;

the name, address and contact details of any person who will act on behalf of the body corporate in relation to the application;

details of the body corporate’s major shareholders and organisation, including:

the name, address and contact details of each director; and

the name, address and contact details of each secretary; and

the name, address and contact details of each senior manager of the body corporate; and

whether any director, secretary or senior manager is, or has been, disqualified from managing a corporation under a law of this jurisdiction or another jurisdiction;

a description of the body corporate’s business or functions, other than the operation of the clearing and settlement facility;

the services in respect of which the Australian CS facility licence is sought, including details of:

the financial products for which clearing and settlement facilities are to be provided; and

the nature of each interest in a financial product that is to be transferred using the clearing and settlement facility; and

the mechanisms to be used by the body corporate to operate the clearing and settlement facility, including (if applicable) arrangements to limit the risk of default by a party to a transaction;

whether the body corporate has applied, or intends to apply, to become a prescribed CS facility;

details of the technological resources that will be used in the operation of the clearing and settlement facility, including details of:

the purpose of the resources; and

how the resources are to be supplied, managed, maintained and upgraded; and

how the security of information technology systems is to be protected;

details of the arrangements for dealing with conflicts between the body corporate’s commercial interests and its obligations to supervise and monitor the clearing and settlement facility;

details of the arrangements for the supervision of employees of the body corporate who have duties and responsibilities of a kind that supervision of the employees is necessary to protect the integrity of the operation of the clearing and settlement facility;

details of the arrangements for managing counterparty risk, including the risks arising from a counterparty being unable to meet its obligations arising out of clearing, settlement or clearing and settlement transactions using the facility;

if the ACCC has made a decision in relation to the clearing and settlement facility that the body corporate will operate—details of the decision.

Example of interests in a financial product: Legal title or an equitable interest.

Example of mechanisms to operate the clearing and settlement facility:

1 The way in which transfers are to be effected.

2 The way in which payment obligations are to be settled.

For paragraph 824A(1)(b) of the Act, the following documents are required as part of an application by the body corporate for an Australian CS facility licence:

the body corporate’s current or proposed operating rules and written procedures;

if applicable—the body corporate’s constitution;

a copy of any agreement material to:

the way in which the clearing and settlement facility is to be operated; and

the way in which the financing of the clearing and settlement facility, and the other resources used to operate it, will be organised; and

the body corporate’s constitution or governance; and

the appointment or employment of directors, secretaries and senior managers of the body corporate;

a copy of any agreement, or proposed agreement, between the body corporate and a market licensee relating to services to be offered to the market licensee;

a copy of any agreement, or proposed agreement, relating to the outsourcing or delegation of a function, facility or service in relation to the facility by the body corporate to another person;

if the body corporate:

uses, or is likely to use, a counterparty; or

will be operating as a central counterparty;

an assessment by an independent auditor of the adequacy of the body corporate’s arrangements for managing counterparty risk;

if the body corporate is a disclosing entity—a copy of each half-year financial report of the body corporate for:

the period of 3 years immediately before the application was made; or

the shorter period in which the body corporate has carried on a business;

if the body corporate is not a disclosing entity—a copy of each annual financial report of the body corporate for:

the period of 3 years immediately before the application was made; or

the shorter period in which the body corporate has carried on a business;

if the body corporate is a related body corporate—a copy of the relevant consolidated annual and half-year financial reports for:

the period of 3 years immediately before the application was made; or

the shorter period in which the body corporate has carried on a business;

a report, by a qualified person who is independent of the body corporate, about the anticipated financial resource requirements of the clearing and settlement facility, including details of:

the total anticipated fixed expenditure and variable expenditure for the first 12 months of operation of the clearing and settlement facility; and

the total anticipated revenue for the first 12 months of operation of the clearing and settlement facility and other sources of financial resources; and

the body corporate’s contingency arrangements in the event of circumstances occurring that affect the body corporate’s ability to operate the clearing and settlement facility;

details of the body corporate’s business plan, or other strategic planning, for the first 12 months of operation of the clearing and settlement facility, that are not included in the other documents mentioned in this regulation.

This Division applies in relation to a body corporate that applies for an Australian CS facility licence that may be granted under subsection 824B(2) of the Act.

For paragraph 824A(1)(a) of the Act, the following information is required as part of an application by the body corporate for an Australian CS facility licence:

the body corporate’s name, address and contact details in this jurisdiction;

the address and contact details of the body corporate’s principal place of business in the foreign country in which its clearing and settlement facility is located;

whether the body corporate is registered under Division 2 of Part 5B.2 of the Act;

the services in respect of which the Australian CS facility licence is sought, including details of the financial products for which clearing and settlement facilities are to be provided;

details of the body corporate’s major shareholders and organisation, including any details that have not already been given to ASIC in accordance with Division 2 of Part 5B.2 of the Act of:

each person whose duties are comparable to those of a director; and

each person whose duties are comparable to those of a secretary; and

each person whose duties are comparable to those of an senior manager of the body corporate.

For paragraph 824A(1)(b) of the Act, the documents required as part of an application by the body corporate for an Australian CS facility licence are:

(a) the body corporate’s authorisation to operate the clearing and settlement facility in the foreign country in which its clearing and settlement facility is located (the home country), including any conditions imposed on the body corporate’s operation of its clearing and settlement facility in the home country; and

a copy of any agreement, or draft agreement, between the body corporate and a market licensee relating to the clearing and settlement facility services to be provided; and

sufficient documentation to allow the Minister to be satisfied that the regulation of the clearing and settlement facility in its home country is equivalent to regulation under the Act.

Example for paragraph (c): Copies of the relevant legislation, rules and procedures in the home country.

For the purposes of subparagraph 843B(1)(b)(i) of the Act, each of the kinds of arrangements referred to in subregulation (2) is prescribed.

The kinds of arrangements are as follows:

an arrangement that is, or is directly connected with, a derivative;

an arrangement that is, or is directly connected with, a securities financing transaction;

an arrangement that is, or governs, securities, financial products, bonds, promissory notes, or syndicated loans;

an arrangement that is a flawed asset arrangement;

an arrangement that is the operating rules (other than the listing rules) of a financial market;

Note: The operating rules of a licensed market are a contract, see subsection 793B(1) of the Act.

an arrangement that is the operating rules of a clearing and settlement facility;

Note: The operating rules of a licensed CS facility are a contract, see subsection 822B(1) of the Act.

an arrangement of which the parties include the Reserve Bank and the operator of a clearing and settlement facility;

an arrangement under which participants in a clearing and settlement facility may settle obligations on behalf of other participants in the facility;

(i) a legally enforceable arrangement referred to in paragraph 9(1)(b) of the Payment Systems and Netting Act 1998 that supports an approved RTGS system (within the meaning of that Act);

Note: The arrangement includes the rules that are part of that arrangement.

(j) an approved netting arrangement (within the meaning of the Payment Systems and Netting Act 1998);

Note: The arrangement includes the rules that are part of that arrangement.

an arrangement that confers rights on:

(i) the operator of an approved RTGS system (within the meaning of the Payment Systems and Netting Act 1998); or

the coordinator of an approved netting arrangement (within the meaning of that Act);

in relation to the operation of that system or netting arrangement;

(l) a contract, agreement or arrangement under which the parties to an arrangement covered by paragraph (i) or (j) (the main arrangement) may settle obligations on behalf of other parties to the main arrangement;

(m) a close-out netting contract (within the meaning of the Payment Systems and Netting Act 1998);

(n) an arrangement under which security is given over financial property (within the meaning of the Payment Systems and Netting Act 1998) in respect of eligible obligations (within the meaning of that Act) of a party to a contract covered by paragraph (m) of this subregulation;

(o) a netting market (within the meaning of the Payment Systems and Netting Act 1998);

(p) a market netting contract (within the meaning of the Payment Systems and Netting Act 1998);

an arrangement under which security is given, in accordance with a market netting contract covered by paragraph (p), in respect of obligations of a party to the market netting contract.

In this Part:

becoming insolvent has the meaning given by regulation 7.5.02.

claim means a claim against the SEGC.

dealer has the meaning given by regulation 7.5.03.

discharge, in relation to an obligation, means:

in the case of a purchase obligation—discharge the whole of the obligation; or

in any other case—discharge the whole or a part of the obligation.

excluded person has the meaning given by regulation 7.5.04.

obligations:

in relation to a participant of a participating market licensee, in relation to a person, includes obligations arising under:

a law; or

the participating market licensee’s operating rules; or

an agreement between;

(A) in any case—the participant and the person; or

(B) if the participant is a partner in a participant of the participating market licensee—the last-mentioned participant and the person; and

in relation to a participant of the licensed CS facility operated by ACH, in relation to a person, includes obligations arising under:

a law; or

the operating rules of ACH; or

an agreement between;

(A) in any case—the participant and the person; or

(B) if the participant is a partner in a participant of the licensed CS facility operated by ACH—the last-mentioned participant and the person; and

in relation to a participant of the licensed CS facility operated by ASTC, in relation to a person, includes obligations arising under:

a law; or

the ASTC operating rules; or

an agreement between:

(A) in any case—the participant and the person; or

(B) if the participant is a partner in a participant of the licensed CS facility operated by ASTC—the last-mentioned participant and the person.

orderly market means an orderly market on a financial market of: a participating market licensee; or an Exchange body.

a participating market licensee; or

an Exchange body.

participating market licensee means a market licensee that is a member of the SEGC.

prescribed period, in relation to a sale or purchase of securities by a dealer, means:

if the operating rules of ACH or a participating market licensee, in which the dealer is a participant, being those operating rules as in force when the agreement for the sale or purchase is made, prescribe a period, for this paragraph, in relation to a class of sales or purchases that includes the sale or purchase—that period; or

in any other case—a period that is reasonable, having regard to all the circumstances relating to the sale or purchase.

property includes money, securities and scrip.

purchase obligation means an obligation to transfer securities under an agreement for the purchase of securities, if the purchase is, for Subdivision 4.3, a reportable transaction.

purchase price means the total of: the amount of the consideration for the purchase; and any brokerage fees and other charges, and any stamp duty and other duties and taxes, payable by the person to the dealer in connection with the purchase.

the amount of the consideration for the purchase; and

any brokerage fees and other charges, and any stamp duty and other duties and taxes, payable by the person to the dealer in connection with the purchase.

relative means a parent or remoter lineal ancestor, son, daughter or remoter issue, or brother or sister, of the person.

reportable transaction means a transaction that is entered into before or after the commencement of this Part in relation to securities, and: (a) is or has at any time been a sale or purchase, by a participant (the first dealer) of a participating market licensee, of securities, if the securities are quoted on a financial market of a participating market licensee when the agreement for the sale or purchase is made, and: in any case—the participating market licensee’s operating rules, as in force when the agreement for the sale or purchase is made, require or permit the first dealer to report the sale or purchase to the participating market licensee; or (ii) if the sale or purchase is to or from, as the case may be, a participant (the second dealer) of a participating market licensee—the last-mentioned participating market licensee’s operating rules, as in force when the agreement for the sale or purchase is made, require or permit the second dealer to report to the last-mentioned participating market licensee the purchase or sale of the securities by the second dealer from or to, as the case may be, the first dealer; or is an agreement to buy or sell securities, because of the exercise of an option contract over securities, if: the option contract was entered into on the financial market of a participating market licensee; and the agreement is required or permitted, by the operating rules of ACH or the participating market licensee, to be reported to the participating market licensee.

(a) is or has at any time been a sale or purchase, by a participant (the first dealer) of a participating market licensee, of securities, if the securities are quoted on a financial market of a participating market licensee when the agreement for the sale or purchase is made, and:

in any case—the participating market licensee’s operating rules, as in force when the agreement for the sale or purchase is made, require or permit the first dealer to report the sale or purchase to the participating market licensee; or

(ii) if the sale or purchase is to or from, as the case may be, a participant (the second dealer) of a participating market licensee—the last-mentioned participating market licensee’s operating rules, as in force when the agreement for the sale or purchase is made, require or permit the second dealer to report to the last-mentioned participating market licensee the purchase or sale of the securities by the second dealer from or to, as the case may be, the first dealer; or

is an agreement to buy or sell securities, because of the exercise of an option contract over securities, if:

the option contract was entered into on the financial market of a participating market licensee; and

the agreement is required or permitted, by the operating rules of ACH or the participating market licensee, to be reported to the participating market licensee.

sale and purchase of securities has the meaning given by regulation 7.5.06.

securities business has the meaning given by regulations 7.5.07 and 7.5.08.

security has the meaning given by regulation 7.5.09.

transfer of securities has the meaning given by regulation 7.5.10.

transferor has the meaning given by paragraph 7.5.53(4)(b).

transferred securities has the meaning given by paragraph 7.5.53(4)(c).

unauthorised execution has the meaning given by paragraph 7.5.53(4)(a).

For subsection 893A(1) of the Act, Part 7.5 of the Act is modified in relation to a licensed market as set out in Schedule 8C.

A body corporate becomes insolvent at a particular time if, and only if, at that time:

an administrator of the body corporate is appointed under section 436A, 436B or 436C; or

the body corporate commences to be wound up or ceases to carry on business; or

a receiver, or a receiver and manager, of property of the body corporate is appointed, whether by a court or otherwise; or

the body corporate enters into a compromise or arrangement with its creditors or a class of them.

A natural person becomes insolvent at a particular time if, and only if, at that time:

(a) a creditor’s petition or a debtor’s petition is presented under Bankruptcy Act 1966 against:Division 2 or 3 of Part IV of the

the person; or

a partnership in which the person is a partner; or

2 or more joint debtors who include the person; or

(b) the person’s property becomes subject to control under Bankruptcy Act 1966; orDivision 2 of Part X of the

(c) the person executes a deed of assignment or deed of arrangement under Part X of the Bankruptcy Act 1966; or

(d) the person’s creditors accept a composition under Part X of the Bankruptcy Act 1966.

(3) A reference in subregulation (2) to a Division or Part of the Bankruptcy Act 1966 includes a reference to provisions of a law of an external Territory, or a country other than Australia or an external Territory, that correspond to that Division or Part.

For this Part (other than Subdivisions 4.7, 4.9 and 4.10), a person is a dealer if the person is, or has been at any time, a participant of a participating market licensee.

(3) For Subdivisions 4.7, 4.9 and 4.10, a person is a dealer if the person is:

a participant of a participating market licensee; or

a participant of the licensed CS facility operated by ACH.

(1) For this Part, an excluded person, in relation to a participant of a participating market licensee, or a participant of the licensed CS facility operated by ACH, means:

in any case—the participant; or

if the participant is not a body corporate:

a person who is the spouse, or who is a relative, of the participant; or

a trustee of a trust in relation to which the participant or a person of a kind mentioned in subparagraph (i) is capable of benefiting; or

a body corporate of which the participant is an officer; or

a body corporate in which the participant or a person of a kind mentioned in subparagraph (i) has a controlling interest; or

a body corporate in which the participant, and a person of a kind mentioned in subparagraph (i) have a controlling interest; or

a body corporate in which the participant and 2 or more persons of a kind mentioned in subparagraph (i) have a controlling interest; or

a body corporate in which 2 or more persons of a kind mentioned in subparagraph (i) together have a controlling interest; or

if the participant is:

a person who is an officer of the body corporate; or

a body corporate that is related to the first-mentioned body corporate; or

a person who is the spouse, or who is a relative, of a person of a kind mentioned in subparagraph (i); or

a trustee of a trust in relation to which a person of a kind mentioned in subparagraph (i) or (iii) is capable of benefiting; or

a body corporate in which a person of a kind mentioned in subparagraph (i) or (iii) has, or 2 or more such persons together have, a controlling interest; or

if the participant is a partner in a participant of the participating market licensee or licensed CS facility and is not a body corporate:

a person who is a partner in the participant; or

a person who is the spouse, or who is a relative, of a partner (not being a body corporate) in the participant; or

a trustee of a trust in relation to which a person of a kind mentioned in subparagraph (i) or (ii) is capable of benefiting; or

a person who is an officer of a body corporate that is a partner in the participant; or

a body corporate of which a person of a kind mentioned in subparagraph (i), (ii) or (iii) is an officer, or in which such a person has, or 2 or more such persons together have, a controlling interest; or

a person who is a participant of the licensed CS facility operated by ACH; or

if the participant is a partner in a participant of the participating market licensee or licensed CS facility and is a body corporate:

a person who is an officer of a body corporate that is a partner in the participant; or

a body corporate that is related to the first-mentioned body corporate; or

a person who is a partner in the participant; or

a person who is the spouse, or who is a relative, of a person (other than a body corporate) of a kind mentioned in subparagraph (i) or (iii); or

a trustee of a trust in relation to which a person of a kind mentioned in subparagraph (i), (iii) or (iv) is capable of benefiting; or

a body corporate in which a person of a kind mentioned in subparagraph (i), (iii) or (iv) has, or 2 or more such persons together have, a controlling interest; or

a person who is a participant of the licensed CS facility operated by ACH.

A reference in subregulation (1) or (1A) to a relative of a person includes a reference to a relative of the spouse (if any) of the person.

A reference in subregulation (1) or (1A) to an officer of a body corporate is a reference to:

a director, secretary or senior manager of the body corporate; or

(b) a person who is an officer of the body corporate by virtue of paragraph (b), (c), (d) or (e) of the definition of officer in section 9 of the Act.

(1) A sale and purchase of securities are taken to consist of 2 distinct transactions:

the sale of the securities by the seller to the buyer; and

the purchase of the securities by the buyer from the seller.

Except so far as the contrary intention appears, a reference in this Part to a sale, or to a purchase, includes a reference to a sale or purchase the agreement for which is made outside this jurisdiction.

For this Part, an agreement to buy or sell securities, because of the exercise of an option contract over securities, if:

the option contract was entered into on the financial market of a participating market licensee; and

the agreement is required, by the operating rules of ACH or the participating market licensee, to be reported to the participating market licensee;

is taken to be a sale and purchase of securities.

(1) For this Part (other than Subdivision 4.9), a securities business is a financial services business of dealing in securities.

Subregulations (4), (5) and (6) apply for the purposes of determining:

whether or not a person carries on, or holds himself, herself or itself out as carrying on, a securities business; and

what constitutes such a business carried on by a person.

Subregulation (6) also applies for the purposes of determining whether or not a person deals in securities.

An act done on behalf of the person by:

the holder of a dealers licence; or

an exempt dealer; or

the holder of an Australian financial services licence; or

a person who is exempted from holding an Australian financial services licence by virtue of subsection 911A(2), (2A), (2B), (2C), (2D) or (2E) of the Act;

must be disregarded.

An act that the person does:

while employed by, or acting for or by arrangement with, a dealer; and

as an employee or agent of, or otherwise on behalf of, on account of, or for the benefit of, the dealer; and

in connection with a securities business carried on by the dealer;

is to be disregarded.

An act or acts done by the person that constitutes or together constitute a dealing by the person in a futures contract (within the meaning of the old Corporations Act) is or are to be disregarded.

For Subdivision 4.9, each of the following is a securities business:

a financial services business of dealing in securities;

a financial services business of dealing in financial products that were option contracts within the meaning of paragraph 92(1)(e) of the old Corporations Act.

(1) For this Part (other than Subdivision 4.7), each of the following is a security:

a security mentioned in section 761A of the Act;

Division 3 securities;

non-Division 3 securities;

an interest in a notified foreign passport fund that is quoted on the financial market of the Australian Stock Exchange Limited;

rights (whether existing or future, and whether contingent or not) to acquire, by way of issue, an interest referred to in paragraph (d) (whether or not on payment of any money or for any other consideration).

(2) For Subdivision 4.7, each of the following is a security:

Division 3 securities;

non-Division 3 securities;

an interest in a notified foreign passport fund that is quoted on the financial market of the Australian Stock Exchange Limited;

rights (whether existing or future, and whether contingent or not) to acquire, by way of issue, an interest referred to in paragraph (c) (whether or not on payment of any money or for any other consideration).

(1) A transfer of securities takes place between a person (the transferor) and another person (the transferee) only if:

in the case of an ASTC-regulated transfer—the transferor does, or causes to be done, all things that the ASTC operating rules require to be done by or on behalf of the transferor to effect the transfer; or

(b) in any other case—the transferor delivers, or causes to be delivered, to the transferee documents (transfer documents) that are sufficient to enable the transferee:

except in the case of Division 3 rights—to become registered as the holder of the securities; or

in the case of Division 3 rights—to obtain the issue to the transferee of the securities to which the Division 3 rights relate;

without the transferor doing anything more, or causing anything more to be done, by way of executing or supplying documents.

If a person:

causes property (other than securities or money) to be transferred to another person; or

causes documents that are sufficient to enable another person to become the legal owner of property (other than securities or money) to be delivered to another person;

the first-mentioned person is taken to have transferred the property to the other person.

If a person causes money to be paid to another person, the first-mentioned person is taken to have paid the money to the other person.

A contravention of a provision of this Part does not constitute an offence.

For paragraph 881B(2)(c) of the Act, the following information, relating to proposed compensation arrangements, is prescribed:

the services and products provided by the financial market, and participants connected with the financial market;

the sources of all funds to be used for compensation;

the proposed minimum amount of cover, and how that amount has been calculated;

the number of markets to which the compensation arrangements are intended to apply;

details of any arrangement between the market operator and any other person associated with the operation of the compensation arrangement;

details of the payments that will be able to be made, in accordance with the compensation arrangements, that will not be payments required by the Act or another law;

the names of the persons responsible for the administration and monitoring functions mentioned in paragraphs 885I(1)(a), (b) and (c) of the Act, and details of the financial, technological and other resources to be used for those purposes;

the name of the proposed auditor of the accounts relating to the compensation arrangements;

the way in which the compensation arrangements will be monitored to ensure that they comply with the Act and these Regulations;

the way in which the compensation arrangements will be monitored to ensure that they are adequate.

For paragraph 882B(2)(a) of the Act, the following information, relating to proposed compensation arrangements, is prescribed:

the services and products provided by the financial market, and participants connected with the financial market;

the sources of all funds to be used for compensation;

the proposed minimum amount of cover, and how that amount has been calculated;

the number of markets to which the compensation arrangements are intended to apply;

details of any arrangement between the market operator and any other person associated with the operation of the compensation arrangement;

details of the payments that will be able to be made, in accordance with the compensation arrangements, that will not be payments required by the Act or another law;

the names of the persons responsible for the administration and monitoring functions mentioned in paragraphs 885I(1)(a), (b) and (c) of the Act, and details of the financial, technological and other resources to be used for those purposes;

the name of the proposed auditor of the accounts relating to the compensation arrangements;

the way in which the compensation arrangements will be monitored to ensure that they comply with the Act and these Regulations;

the way in which the compensation arrangements will be monitored to ensure that they are adequate.

For subsection 883D(6) of the Act, a notification to the Commonwealth of payments of levy received by the operator of a market as agent for the Commonwealth must:

be given for each period of 6 months ending on 31 December and 30 June; and

be given in writing to:

the Secretary of the Department of the Treasury; or

another officer of that Department notified in writing by the Secretary to the receiver of the levy; and

set out the total of the levies (if any) that became payable in the period; and

set out the total of the levies (if any) received in the period; and

be given not later than 2 weeks after the end of the period.

For subsection 885E(5) of the Act, the rate of interest is 5%.

The Minister may notify the SEGC that the Minister is satisfied that:

a market licensee specified in the notification is operating a financial market to which Division 4 of Part 7.5 of the Act applies; or

each market licensee specified in the notification is operating a financial market to which Division 4 of Part 7.5 of the Act applies.

For section 892G of the Act, if, on a day, the amount in the NGF is greater than the minimum amount identified in accordance with section 889I of the Act, the amount by which it is greater is excess money.

For section 892G of the Act, if, on a day:

a fidelity fund (other than the NGF) is the sole source of funds available to cover claims for the purposes of Division 3 arrangements; and

the amount in the fidelity fund is greater than the minimum amount of cover identified in accordance with paragraph 882A(4)(a) of the Act;

the amount by which it is greater is excess money.

For section 892G of the Act, if, on a day:

a fidelity fund (other than the NGF) is not the sole source of funds available to cover claims for the purposes of Division 3 arrangements; and

the amount in the fidelity fund is greater than the minimum amount of cover specified in accordance with paragraph 882A(4)(a) of the Act, reduced by the sum of the amounts of cover from each other source of funds available for the purposes of the same Division 3 arrangements;

the amount by which it is greater is excess money.

The Minister may approve, in writing, a matter as an approved purpose for which excess money may be used by a market licensee.

The matter must relate to:

the creation of, or participation in, a program for the development of the financial industry that:

is conducted primarily for a public benefit; and

is not conducted primarily to promote the profitability of the commercial operations of any market; or

the payment of premiums for fidelity insurance or other compensation arrangements for the financial market as part of an approved compensation arrangement for Division 3 of Part 7.5 of the Act; or

(c) costs paid by the market licensee in relation to ASIC’s responsibilities for market supervision created by the Corporations Amendment (Financial Market Supervision) Act 2010; or

(d) the making of payments to ASIC by the market licensee in relation to ASIC’s responsibilities for market supervision created by the Corporations Amendment (Financial Market Supervision) Act 2010.

Examples for paragraph (2)(a):

1 Public education activities.

2 Research into future product or service needs.

3 Research and consulting services intended to improve the international performance of Australian financial markets.

4 Improvement of Australia’s role as a financial centre.

The Minister may, in relation to an approved purpose, determine conditions to which the use of excess money for the approved purpose must be subject.

If the Minister notifies the SEGC in accordance with subregulation 7.5.86(1), the SEGC may determine, in writing, that an amount of excess money specified in the determination be paid to 1 or more of the market licensees specified in the Minister’s notification.

The amount must be paid in accordance with the SEGC’s determination.

A market licensee that receives a payment of excess money from the NGF must pay the excess money into an account that:

is kept separately from other accounts used by the market licensee; and

is designated as a ‘financial industry development account’.

A market licensee that receives a payment of excess money from the NGF must use the money only:

for a purpose approved under subregulation 7.5.88(1), and in accordance with any conditions to which the use of the money is subject under subregulation 7.5.88(3); or

in accordance with subregulation (3); or

to make a repayment to the NGF.

If the market licensee contravenes subregulation (1), the market licensee must:

notify the SEGC of the contravention as soon as practicable; and

repay the amount involved into its financial industry development account.

If there is no immediate requirement for the market licensee to use an amount of excess money in its financial industry development account:

the market licensee may invest the amount in a way authorised by section 892C of the Act; and

if the market licensee invests excess money during a financial year, the market licensee must pay any interest or profit from the investment into its financial industry development account.

The market licensee must, in respect of each financial year during which, at any time, there is money in its financial industry development account, lodge a completed Form 719 with ASIC not later than 3 months after the end of the financial year.

If there is excess money in a fidelity fund (other than the NGF), the market licensee to which the excess money relates may pay an amount of the excess money into an account that:

is kept separately from other accounts used by the market licensee; and

is designated as a ‘financial industry development account’.

A market licensee that receives a payment of excess money from a fidelity fund must use the money only:

for a purpose approved under subregulation 7.5.88(1), and in accordance with any conditions to which the use of the money is subject under subregulation 7.5.88(3); or

in accordance with subregulation (3); or

to make a repayment to the fidelity fund.

If the market licensee contravenes subregulation (1), the market licensee must repay the amount involved into its financial industry development account.

If there is no immediate requirement for the market licensee to use an amount of excess money in its financial industry development account:

the market licensee may invest the amount in a way authorised by section 892C of the Act; and

if the market licensee invests excess money during a financial year, the market licensee must pay any interest or profit from the investment into its financial industry development account.

The market licensee must, in respect of each financial year during which, at any time, there is money in its financial industry development account, lodge a completed Form 719 with ASIC not later than 3 months after the end of the financial year.

For section 892J of the Act, the following persons each have qualified privilege in respect of the publication of a statement, in accordance with Division 3 of Part 7.5 of the Act, that a contract of insurance does, or does not cover a particular participant:

a market licensee;

the board of the market licensee;

an agent of the board of the market licensee;

an employee of a market licensee.

For section 892J of the Act, the following persons each have qualified privilege in respect of a notice, in accordance with Division 3 of Part 7.5 of the Act, seeking claims in relation to a particular participant of a financial market:

a market licensee;

the board of the market licensee;

an agent of the board of the market licensee;

an employee of a market licensee.

This regulation is made for subsection 903A(5) of the Act and applies to information given to ASIC, by the operator (or an officer of the operator) of a licensed derivative trade repository, under a provision of:

Part 7.5A of the Act; or

the regulations made for that Part; or

the derivative transaction rules or derivative trade repository rules.

The information is taken, for the purpose of section 127 (confidentiality) of the ASIC Act, to be given to ASIC in confidence in connection with the performance of ASIC’s functions under the Act, unless:

the information has been made publicly available in accordance with the provisions mentioned in paragraph (1)(a), (b) or (c); or

a law requires or permits the information to be released.

For paragraph 904B(2)(d) of the Act, the persons or bodies mentioned in Article 81(3)(a) to (e), (g), (h) and (j) of Regulation (EU) No 648/2012 of the European Parliament and the Council of the European Union, dated 4 July 2012, may request a derivative trade repository licensee to provide the person or body with derivative trade data that is retained in the derivative trade repository.

For subsection 904B(4) of the Act, information must not be included in derivative trade data provided in response to a request under subregulation (1) unless:

the information relates to a transaction or position that is required to be reported under either of the following:

(i) rules made under paragraph 901A(2)(b) of the Corporations Act 2001;

(ii) the conditions of an exemption given under Corporations Act 2001; andsection 907D of the

subregulation (3) or (4) applies.

This subregulation applies if the information relates to a transaction or position that would, but for mutual regulatory recognition arrangements, be required to be reported under one or more of the following:

Regulation (EU) No 648/2012 of the European Parliament and the Council of the European Union dated 4 July 2012;

Commission Implementing Regulation (EU) No 1247/2012 of the European Parliament and the Council of the European Union, dated 19 December 2012;