Corporations Act 2001

Chapter 7—Financial services and markets

Part 7.9—Financial product disclosure and other provisions relating to issue, sale and purchase of financial products

1010A Part generally does not apply to securities

(1) Apart from section 1017F and Divisions 5A, 5B, 5C and 6 (and provisions of Division 7 that apply in relation to that section or provisions of those Divisions), nothing in this Part applies in relation to securities.

Note: Chapters 6CA and 6D provide for disclosure in relation to securities.

(2) Apart from section 1017F and Divisions 5A, 5B and 6, nothing in this Part applies in relation to debentures, stocks or bonds issued or proposed to be issued by a government.

Note: These financial products are not securities within the meaning of section 761A.

1010B Part does not apply to financial products not issued in the course of a business

(1) Apart from Division 5A, nothing in this Part applies in relation to a financial product that is not or was not issued, or that will not be issued, in the course of a business of issuing financial products.

(2) For this purpose, the issue of:

(a) any managed investment product; or

(aa) any foreign passport fund product; or

(b) any superannuation product;

is taken to occur in the course of a business of issuing financial products.

1010BA Part does not apply to contribution plans

Apart from section 1017F and Divisions 5A and 6 (and provisions of Division 7 that apply in relation to that section or provisions of those Divisions), nothing in this Part applies in relation to contribution plans.

1010C Special provisions about meaning of sale and offer

(1) For the purposes of this Part, a reference to a sale or purchase of a financial product is a reference to a sale of the product by, or a purchase of the product from, a person who has (whether by issue or otherwise) acquired the product. The issue of a financial product is not a sale of the financial product.

(2) For the purposes of this Part:

(a) a reference to offering to issue a financial product includes a reference to inviting an application for the issue of the financial product; and

(b) a reference to offering to sell a financial product includes a reference to inviting an offer to purchase the financial product.

1010D General approach to offence provisions

Division 7 contains provisions creating offences by reference to various rules contained in Divisions of this Part. However, it does not create all the offences relating to those rules, as some offences are created by subsection 1311(1). Where offences are created by subsection 1311(1) in relation to a rule, this is indicated by a note at the end of the provision containing the rule.

Division 2—Product Disclosure Statements

Subdivision A—Preliminary

1011A Jurisidictional scope of Division

(1) Subject to subsection (2), sections 1012A, 1012B and 1012C only apply in relation to offers and recommendations referred to in those sections that are received in this jurisdiction.

(2) Section 1012B also applies in relation to issues referred to in subparagraph 1012B(3)(a)(iii) that are made in this jurisdiction.

(3) The regulations may make provision dealing with the jurisdictional scope of some or all of the other provisions of this Division. The other provisions of this Division have effect subject to any such regulations.

1011B Definitions

In this Division:

issue Statement has the meaning given by subsection 1013A(1).

offer has a meaning affected by sections 1010C and 1011C.

regulated person, in relation to a financial product, means:

(a) an issuer of the financial product; or

(b) a seller of the financial product if the sale takes place in circumstances described in subsection 1012C(5), (6) or (8) (secondary sales that require a Product Disclosure Statement); or

(d) any authorised representative of a financial services licensee; or

(f) any person who is not required to hold an Australian financial services licence because the person is covered by:

(i) paragraph 911A(2)(j); or

(ii) an exemption in regulations made for the purposes of paragraph 911A(2)(k); or

(iii) an exemption specified by ASIC for the purposes of paragraph 911A(2)(l); or

(g) any person who is required to hold an Australian financial services licence but who does not hold such a licence.

responsible person for a Product Disclosure Statement has the meaning given by subsection 1013A(3).

sale has a meaning affected by section 1010C.

sale Statement has the meaning given by subsection 1013A(2).

1011C Treatment of offers of options over financial products

For the purposes of this Division:

(a) an offer of an option over a financial product is not to be taken to be an offer of the underlying financial product; and

(b) the grant of an option without an offer of the option is taken to be an offer of the option; and

Subdivision B—Requirement for a Product Disclosure Statement to be given

1012A Obligation to give Product Disclosure Statement—personal advice recommending particular financial product

Section sets out recommendation situation in which Product Disclosure Statement required

(1) This section sets out the situations in which giving financial product advice that consists of, or includes, a recommendation to acquire a financial product gives rise to an obligation on a regulated person to give another person a Product Disclosure Statement for the product.

(2) For the purposes of this Division:

(a) each of the situations is a recommendation situation; and

(b) the relevant conduct for that situation is the making of the recommendation; and

Personal advice recommending a particular financial product

(3) A regulated person must give a person a Product Disclosure Statement for a financial product if:

(a) the regulated person provides financial product advice to the person that consists of, or includes, a recommendation that the person acquire the financial product; and

(b) the person would acquire the financial product by way of:

(i) the issue of the product to the person (rather than the transfer of the product to the person); or

(ii) the transfer of the product to the person in circumstances described in subsection 1012C(5), (6) or (8) (secondary sales that require a Product Disclosure Statement); and

(d) the financial product advice is personal advice to the client.

The Product Disclosure Statement must be given at or before the time when the regulated person provides the advice and must be given in accordance with this Division.

This section has effect subject to other provisions

(4) This section has effect subject to sections 1012D, 1012DA, 1012E, 1012F, 1012G and 1014E.

1012B Obligation to give Product Disclosure Statement—situations related to issue of financial products

Section sets out issue situations in which Product Disclosure Statement required

(1) This section sets out situations in which:

(a) an offer relating to the issue of a financial product; or

(b) the issue of a financial product;

gives rise to an obligation on a regulated person to give another person a Product Disclosure Statement for the product.

(2) For the purposes of this Division:

(a) each of the situations is an issue situation; and

(b) the relevant conduct for that situation is the conduct by the regulated person that gives rise to the obligation to give the Product Disclosure Statement; and

The main issue situations

(3) A regulated person must give a person a Product Disclosure Statement for a financial product if:

(a) the regulated person:

(i) offers to issue the financial product to the person; or

(ii) offers to arrange for the issue of the financial product to the person; or

(iii) issues the financial product to the person in circumstances in which there are reasonable grounds to believe that the person has not been given a Product Disclosure Statement for the product; and

(b) the financial product is, or is to be, issued to the person as a retail client.

The Product Disclosure Statement must be given at or before the time when the regulated person makes the offer, or issues the financial product, to the person and must be given in accordance with this Division.

Note: If a Product Disclosure Statement is given when the offer is made, it will not need to be given again when the product is issued to the person (see subsection 1012D(1)) unless the Product Disclosure Statement that was given is no longer up to date.

Receiving offer to acquire financial product

(4) A regulated person must give a person a Product Disclosure Statement for a financial product if:

(a) the person makes an offer to the regulated person to acquire the financial product; and

(b) the person would acquire the financial product by way of the issue of the product to the person (rather than the transfer of the product to the person); and

The Product Disclosure Statement must be given to the person before the person becomes bound by a legal obligation to acquire the financial product pursuant to the offer and must be given in accordance with this Division.

This section has effect subject to other provisions

(5) This section has effect subject to sections 1012D, 1012DAA, 1012E, 1012F, 1012G and 1014E.

1012C Obligation to give Product Disclosure Statement—offers related to sale of financial products

Section sets out sale situations in which Product Disclosure Statement required

(1) This section sets out situations in which an offer relating to the sale of a financial product gives rise to an obligation on a regulated person to give another person a Product Disclosure Statement for the product.

(2) For the purposes of this Division:

(a) each of the situations is a sale situation; and

(b) the relevant conduct for that situation is the offer; and

Sale offers that require a Product Disclosure Statement

(3) A regulated person must give a person a Product Disclosure Statement for a financial product if:

(a) the regulated person offers to sell the financial product to the person; and

(b) a sale of the product to the person pursuant to the offer would take place in circumstances covered by subsection (5), (6) or (8); and

The Product Disclosure Statement must be given at or before the time when the regulated person makes the offer and must be given in accordance with this Division.

(4) A regulated person must give a person a Product Disclosure Statement for a financial product if:

(a) the person makes an offer to the regulated person to acquire the financial product; and

(b) the person would acquire the financial product by way of the transfer of the product to the person; and

(c) a sale of the product to the person pursuant to the offer would take place in the circumstances described in subsection (5), (6) or (8); and

(d) the financial product is to be sold to the person as a retail client.

Off‑market sale by controller

(5) This subsection covers the circumstances in which:

(a) the seller controls the issuer of the financial product; and

(b) either:

(i) the product is not able to be traded on any licensed market; or

(ii) although the product is able to be traded on a licensed market, the offer is not made in the ordinary course of trading on a licensed market.

Note: See section 50AA for when a person controls a body.

Sale amounting to indirect issue

(6) This subsection covers the circumstances in which:

(a) the offer is made within 12 months after the issue of the financial product; and

(b) the product was issued without a Product Disclosure Statement for the product being prepared; and

(i) the issuer issued the product with the purpose of the person to whom it was issued selling or transferring the product, or granting, issuing or transferring interests in, or options or warrants over, the product; or

(ii) the person to whom the product was issued acquired it with the purpose of selling or transferring the product, or granting, issuing or transferring interests in, or options or warrants over, the product.

The purpose test in subsection (6)

(7) For the purposes of subsection (6):

(a) a financial product is taken to be:

(i) issued with the purpose referred to in subparagraph (6)(c)(i); or

(ii) acquired with the purpose referred to in subparagraph (6)(c)(ii);

if there are reasonable grounds for concluding that the product was issued or acquired with that purpose (whether or not there were or may have been other purposes for the issue or acquisition); and

(b) without limiting paragraph (a), a financial product is taken to be:

(i) issued with the purpose referred to in subparagraph (6)(c)(i); or

(ii) acquired with the purpose referred to in subparagraph (6)(c)(ii);

if the financial product, or any financial product of the same kind that was issued at the same time, is subsequently sold, or offered for sale, within 12 months after issue, unless it is proved that the circumstances of the issue and the subsequent sale or offer are not such as to give rise to reasonable grounds for concluding that the product was issued or acquired with that purpose.

Sale amounting to indirect off‑market sale by controller

(8) This subsection covers the circumstances in which:

(a) the offer is made within 12 months after the sale of the financial product by a person (the controller) who controlled the issuer of the product at the time of the sale; and

(b) either:

(i) at the time of the sale by the controller, the product was not able to be traded on any licensed market; or

(ii) although the product was able to be traded on a licensed market at that time, the sale by the controller did not occur in the ordinary course of trading on a licensed market; and

(c) a Product Disclosure Statement was not prepared by, or on behalf of, the controller before the sale of the product by the controller; and

(d) either:

(i) the controller sold the product with the purpose of the person to whom it was sold selling or transferring the product, or granting, issuing or transferring interests in, or options or warrants over, the product; or

(ii) the person to whom the controller sold the product acquired it with the purpose of selling or transferring the product, or granting, issuing or transferring interests in, or options or warrants over, the product.

Note: See section 50AA for when a person controls a body.

The purpose test in subsection (8)

(9) For the purposes of subsection (8):

(a) a financial product is taken to be:

(i) sold with the purpose referred to in subparagraph (8)(d)(i); or

(ii) acquired with the purpose referred to in subparagraph (8)(d)(ii);

if there are reasonable grounds for concluding that the product was sold or acquired with that purpose (whether or not there were or may have been other purposes for the sale or acquisition); and

(b) without limiting paragraph (a), a financial product is taken to be:

(i) sold with the purpose referred to in subparagraph (8)(d)(i); or

(ii) acquired with the purpose referred to in subparagraph (8)(d)(ii);

if the financial product, or any financial product of the same kind that was sold by the controller at the same time, is subsequently sold, or offered for sale, within 12 months after issue, unless it is proved that the circumstances of the initial sale and the subsequent sale or offer are not such as to give rise to reasonable grounds for concluding that the product was sold or acquired (in the initial sale) with that purpose.

This section has effect subject to other provisions

(10) This section has effect subject to sections 1012D, 1012DA, 1012E and 1014E.

1012D Situations in which Product Disclosure Statement is not required

Recommendation, issue or sale situation—client has already received an up to date Product Disclosure Statement

(1) In a recommendation situation, issue situation or sale situation, the regulated person does not have to give the client a Product Disclosure Statement if:

(a) the client has already received a Product Disclosure Statement that contains all of the information that the first‑mentioned Product Disclosure Statement would be required to contain; or

(b) the regulated person believes on reasonable grounds that paragraph (a) applies.

Recommendation, issue or sale situation—client has or has access to up to date information

(2) In a recommendation situation, issue situation or sale situation, the regulated person does not have to give the client a Product Disclosure Statement for the financial product if:

(a) the client already holds a financial product of the same kind; and

(b) the regulated person believes on reasonable grounds that the client has received, or has, and knows that they have, access to, all of the information that the first‑mentioned Product Disclosure Statement would be required to contain through:

(i) a Product Disclosure Statement; and

(ii) information provided to the client under section 1017B, 1017C or 1017D or through continuous disclosure under Chapter 6CA.

Note: Paragraph (a)—see subsection (10).

Recommendation or issue situation—interests in self‑managed superannuation funds

(2A) In a recommendation situation or issue situation, the regulated person does not have to give the client a Product Disclosure Statement for the financial product if:

(a) the financial product is an interest in a self‑managed superannuation fund; and

(b) the regulated person believes on reasonable grounds that the client has received, or has, and knows that they have, access to, all of the information that the Product Disclosure Statement would be required to contain.

Recommendation, issue or sale situation—no information required to be in Product Disclosure Statement

(2B) In a recommendation situation, issue situation or sale situation, the regulated person does not have to give the client a Product Disclosure Statement for the financial product if, because of section 1013F, no information would be required to be included in the Statement.

Recommendation or issue situation—certain offers to present holders

(3) In a recommendation situation or issue situation, the regulated person does not have to give the client a Product Disclosure Statement for the financial product if:

(a) the client already holds a financial product of the same kind; and

(b) either:

(i) in a recommendation situation—the advice that constitutes the relevant conduct relates to an offer made under a distribution reinvestment plan or switching facility; or

(ii) in an issue situation—the offer or issue that constitutes the relevant conduct is made under a distribution reinvestment plan or switching facility.

Note: Paragraph (a)—see subsection (10).

Recommendation, issue or sale situation—no consideration to be provided

(5) In a recommendation situation, an issue situation or a sale situation, the regulated person does not have to give the client a Product Disclosure Statement if:

(a) no consideration is to be provided for the issue or sale of the financial product; and

(b) the financial product is not an option and is:

(i) a managed investment product; or

(ia) a foreign passport fund product; or

(ii) a financial product of a kind prescribed by regulations made for the purposes of this subparagraph.

(6) In a recommendation situation, an issue situation or a sale situation, the regulated person does not have to give the client a Product Disclosure Statement if:

(a) the financial product is an option; and

(b) no consideration is to be provided for the issue or sale of the financial product; and

Issue or sale situation—takeovers

(7) In an issue situation or a sale situation, the regulated person does not have to give the client a Product Disclosure Statement if:

(a) the financial product is:

(i) a managed investment product; or

(ia) a foreign passport fund product; or

(ii) an option to acquire, by way of transfer, a share in a body, a debenture of a body or a legal or equitable right or interest in a share in a body or a debenture of a body; and

(b) the offer that constitutes the relevant conduct is made as consideration for an offer made under a takeover bid under Chapter 6; and

Note: Although a Product Disclosure Statement is not needed, disclosures must be made in the bidder’s document under section 636.

Recommendation, issue or sale situation—responsible entity an exempt body

(8) In a recommendation situation, an issue situation or a sale situation, the regulated person does not have to give the client a Product Disclosure Statement if:

(a) the financial product is a financial product described in paragraph 764A(1)(ba) (which relates to certain managed investment schemes that are not registered schemes); and

(b) the holder of the office (by whatever name it is known), in relation to the managed investment scheme, that corresponds most closely to the office of responsible entity of a registered scheme is an exempt body; and

(i) the recommendation that constitutes the relevant conduct relates to an offer made by the office holder referred to in paragraph (b); or

(ii) the offer that constitutes the relevant conduct is made by or to the office holder referred to in paragraph (b).

Note 1: Section 66A defines exempt body.

Note 2: In the case of a sale situation, there is no additional requirement equivalent to paragraph (c).

Recommendation or issue situation—interim contracts of insurance

(9) In a recommendation situation or an issue situation, the regulated person does not have to give the client a Product Disclosure Statement if the financial product is an interim contract of insurance (as defined in subsection 11(2) of the Insurance Contracts Act 1984).

Note: This does not detract from the obligation to give a Product Disclosure Statement relating to any contract of insurance that replaces or supersedes the interim contract.

Recommendation, issue or sale situation—client is associated with registered scheme

(9A) In a recommendation situation, an issue situation or a sale situation, the regulated person does not have to give the client a Product Disclosure Statement if:

(a) the financial product is a managed investment product; and

(b) the client is associated (within the meaning of subsection (9B)) with the scheme’s responsible entity.

(9B) For the purposes of subsection (9A), the client is associated with the scheme’s responsible entity if the client is:

(a) a senior manager of the responsible entity or of a related body corporate; or

(b) a spouse, parent, child, brother or sister of a person who is a senior manager of the responsible entity or a related body corporate; or

Recommendation, issue or sale situation—client is associated with a notified foreign passport fund

(9C) In a recommendation situation, an issue situation or a sale situation, the regulated person does not have to give the client a Product Disclosure Statement if:

(a) the financial product is a foreign passport fund product; and

(b) the client is associated (within the meaning of subsection (9D)) with the fund’s operator.

(9D) For the purposes of subsection (9C), the client is associated with the fund’s operator if the client is:

(a) a senior manager of the operator or of a related body corporate; or

(b) a spouse, parent, child, brother or sister of a person who is a senior manager of the operator or a related body corporate; or

Interpretation

(10) For the purposes of this section:

(a) a financial product (other than a managed investment product, a foreign passport fund product or a superannuation product) is of the same kind as another financial product only if they are both issued:

(i) by the same issuer; and

(ii) on the same terms and conditions (other than price); and

(b) a managed investment product, a foreign passport fund product or a superannuation product is of the same kind as another product only if the other product is an interest in the same scheme or fund; and

(c) a reference to information that a Product Disclosure Statement would be required to contain includes a reference to information that would be required to be in any statement that the Product Disclosure Statement would be required to contain.

1012DAA Rights issues for which Product Disclosure Statement is not required

(1) In a recommendation situation or issue situation, the regulated person does not have to give the client a Product Disclosure Statement if:

(a) but for subsection (2), the regulated person would be required by section 1012B to give a Product Disclosure Statement for the transfer or issue of a financial product (the relevant product); and

(b) a determination under subsection (3) was not in force in relation to the issuer of the relevant product at the time when the relevant product was issued.

Conditions required for rights issue

(2) The regulated person does not have to give the client a Product Disclosure Statement if:

(a) the relevant product is being offered under a rights issue; and

(b) the class of the relevant product are quoted securities at the time at which the offer is made; and

(c) trading in that class of the relevant product on a prescribed financial market on which they are quoted was not suspended for more than a total of 5 days during the shorter of the following periods:

(i) the period during which the class of the relevant product is quoted;

(ii) the period of 12 months before the day on which the offer is made; and

(d) no exemption under section 111AS or 111AT covered the issuer of the relevant product, or any person as director or auditor of the issuer, at any time during the relevant period referred to in paragraph (c); and

(e) no order under section 340, 340A, 341 or 341A covered the issuer of the relevant product, or any person as director or auditor of the issuer, at any time during the relevant period referred to in paragraph (c); and

(f) the issuer of the relevant product gives the relevant market operator for the issuer a written notice that complies with subsection (7) within the 24 hour period before the relevant conduct occurs.

Determination by ASIC

(3) ASIC may make a determination under this subsection if ASIC is satisfied that in the previous 12 months the issuer of the relevant product contravened any of the following provisions:

(a) the provisions of Chapter 2M as they apply to the registered scheme in which the relevant product is an interest;

(aa) the provisions of Chapter 2M as they apply to the notified foreign passport fund in which the relevant product is an interest;

(b) section 674 or 675 as it applies to the registered scheme in which the relevant product is an interest;

(ba) section 674 or 675 as it applies to the notified foreign passport fund in which the relevant product is an interest;

(d) subsection (10) of this section;

(e) section 1308 as it applies to a notice under subsection (2) of this section.

(4) The determination must be made in writing and a copy must be published in the Gazette as soon as practicable after the determination is made.

(5) The determination made under subsection (3) is not a legislative instrument.

(6) A failure to publish a copy of the determination does not affect the validity of the determination.

Requirements for notice

(7) A notice complies with this subsection if the notice:

(a) states that the relevant product was issued without a Product Disclosure Statement for the relevant product being prepared; and

(b) states that the notice is being given under paragraph (2)(f); and

(c) states that, as a disclosing entity, the issuer of the relevant product is subject to regular reporting and disclosure obligations; and

(d) if the relevant product is a managed investment product—states that, as at the date of the notice, the issuer of the relevant product has complied with:

(i) the provisions of Chapter 2M as they apply to the registered scheme in which the relevant product is an interest; and

(ii) section 674 as it applies to that registered scheme; and

(da) if the relevant product is a foreign passport fund product—states that, as at the date of the notice, the issuer of the relevant product has complied with:

(i) the provisions of Chapter 2M as they apply to the fund in which the relevant product is an interest; and

(ii) section 674 as it applies to that fund; and

(e) sets out any information that is excluded information as at the date of the notice (see subsections (8) and (9)); and

(f) states:

(i) the potential effect the issue of the relevant product will have on the control of the body; and

(ii) the consequences of that effect.

Note 1: A person is taken not to contravene section 1021C if a notice purports to comply with this subsection but does not actually comply with this subsection: see subsection 1021C(5).

Note 2: A notice must not be false or misleading in a material particular, or omit anything that would render it misleading in a material respect: see sections 1308 and 1309. The issuer has an obligation to correct a defective notice: see subsection (10) of this section.

(8) For the purposes of subsection (7), excluded information is information:

(a) that has been excluded from a continuous disclosure notice in accordance with the listing rules of the relevant market operator to whom that notice is required to be given; and

(b) that a person would reasonably require for the purpose of making a decision, as a retail client, whether to acquire the relevant product.

(9) The notice given under subsection (2) must contain any excluded information only to the extent to which it is reasonable for a person considering, as a retail client, whether to acquire the relevant product to expect to find the information in a Product Disclosure Statement.

Obligation to correct defective notice

(10) The issuer of the relevant product contravenes this subsection if:

(a) the notice given under subsection (2) is defective; and

(b) the issuer becomes aware of the defect in the notice within 12 months after the relevant product is issued; and

(c) the issuer does not, within a reasonable time after becoming aware of the defect, give the relevant market operator a notice that sets out the information necessary to correct the defect.

(11) For the purposes of subsection (10), the notice under subsection (2) is defective if the notice:

(a) does not comply with paragraph (2)(f); or

(b) is false or misleading in a material particular; or

1012DA Product Disclosure Statement not required for sale amounting to indirect issue

Product Disclosure Statement not required

(1) In a recommendation situation or sale situation, the regulated person does not have to give the client a Product Disclosure Statement if:

(a) but for subsection (5), (11) or (12), the regulated person would be required by section 1012A or 1012C to give a Product Disclosure Statement for the relevant product; and

(b) the transfer or sale of the financial product (the relevant product) to the client would take place in circumstances covered by subsection 1012C(6); and

(d) a determination under subsection (2) was not in force in relation to the issuer of the relevant product at the time when the relevant product was issued.

(1A) In a recommendation situation or sale situation, the regulated person does not have to give the client a Product Disclosure Statement if:

(a) but for subsection (5), the regulated person would be required by section 1012C to give a Product Disclosure Statement for the transfer or sale of the financial product (the relevant product); and

(b) the transfer or sale of the relevant product to the client would take place in circumstances covered by subsection 1012C(8); and

(d) a determination under subsection (2) was not in force in relation to the issuer of the relevant product at the time when the relevant product was issued.

Determination by ASIC

(2) ASIC may make a determination under this subsection if ASIC is satisfied that in the previous 12 months the issuer of the relevant product contravened any of the following provisions:

(a) the provisions of Chapter 2M as they apply to:

(i) the issuer; or

(ii) if the relevant product is an interest in a registered scheme—the scheme; or

(iii) if the relevant product is an interest in a notified foreign passport fund—the fund;

(b) section 674 or 675 as it applies to:

(i) the issuer; or

(ii) if the relevant product is an interest in a registered scheme—the scheme; or

(iii) if the relevant product is an interest in a notified foreign passport fund—the fund;

(d) subsection (9) of this section;

(e) section 1308 as it applies to a notice under subsection (5) of this section.

(3) The determination must be made in writing and a copy must be published in the Gazette as soon as practicable after the determination is made.

(4) A failure to publish a copy of the determination does not affect the validity of the determination.

Transfer or sale of quoted securities—case 1

(5) The regulated person does not have to give the client a Product Disclosure Statement if:

(a) the relevant product is in a class of financial products that were quoted securities at all times in the 3 months before the day on which the relevant product was issued; and

(b) trading in that class of financial products on a prescribed financial market on which they were quoted was not suspended for more than a total of 5 days during the shorter of the period during which the class of financial product was quoted, and the period of 12 months before the day on which the relevant product was issued; and

(c) no exemption under section 111AS or 111AT covered the issue of the relevant product, or any person as director or auditor of the issuer, at any time during the relevant period referred to in paragraph (b); and

(d) no order under section 340, 340A, 341 or 341A covered the issuer of the relevant product, or any person as director or auditor of the issuer, at any time during the relevant period referred to in paragraph (b); and

(e) either:

(i) if the regulated person is not required under subsection (1) to give a Product Disclosure Statement—the issuer of the relevant product gives the relevant market operator for the issuer a written notice that complies with subsection (6) before the relevant conduct occurs; or

(ii) if the regulated person is not required under subsection (1A) to give a Product Disclosure Statement—both the issuer of the relevant product, and the controller, give the relevant market operator for the issuer a written notice that complies with subsection (6) before the relevant conduct occurs.

(6) A notice complies with this subsection if the notice:

(a) is given within 5 business days after the day on which the relevant product was issued; and

(b) states that the relevant product was issued without a Product Disclosure Statement for the relevant product being prepared; and

(d) states that, as a disclosing entity, the issuer of the relevant product is subject to regular reporting and disclosure obligations; and

(e) states that, as at the date of the notice, the issuer of the relevant product has complied with the provisions of Chapter 2M, and of section 674, as those provisions apply to:

(i) the issuer; or

(ii) if the relevant product is an interest in a registered scheme—the scheme; or

(iii) if the relevant product is an interest is a notified foreign passport fund—the fund; and

(f) sets out any information that is excluded information as at the date of the notice (see subsections (7) and (8)).

Note 1: A person is taken not to contravene section 1021C if a notice purports to comply with this subsection but does not actually comply with this subsection: see subsection 1021C(5).

(7) For the purposes of subsection (6), excluded information is information:

(a) that has been excluded from a continuous disclosure notice in accordance with the listing rules of the relevant market operator to whom that notice is required to be given; and

(b) that a person would reasonably require for the purpose of making a decision, as a retail client, whether to acquire the relevant product.

(8) The notice given under subsection (5) must contain any excluded information only to the extent to which it is reasonable for a person considering, as a retail client, whether to acquire the relevant product to expect to find the information in a Product Disclosure Statement.

Obligation to correct defective notice

(9) The issuer of the relevant product contravenes this subsection if:

(a) the notice given under subsection (5) is defective; and

(b) the issuer becomes aware of the defect in the notice within 12 months after the relevant product is issued; and

(c) the issuer does not, within a reasonable time after becoming aware of the defect, give the relevant market operator a notice that sets out the information necessary to correct the defect.

(10) For the purposes of subsection (9), the notice under subsection (5) is defective if the notice:

(a) does not comply with paragraph (6)(f); or

(b) is false or misleading in a material particular; or

Transfer or sale of quoted securities—case 2

(11) The regulated person does not have to give the client a Product Disclosure Statement if:

(a) the relevant product is in a class of financial products that are quoted securities of the issuer; and

(b) either:

(i) a Product Disclosure Statement required to be given by section 1012B is lodged with ASIC on or after the day on which the relevant product is issued but before the day on which the relevant conduct occurs; or

(ii) a Product Disclosure Statement required to be given by section 1012B is lodged with ASIC before the day on which the relevant product is issued and, on the day on which the relevant product is issued, the Product Disclosure Statement is still being used by the issuer of the relevant product for offers of financial products in the same class of financial products as the relevant product; and

(c) the Product Disclosure Statement is for a financial product of the issuer of the relevant product that is in the same class of financial products as the relevant product.

Transfer or sale of quoted securities—case 3

(12) The regulated person does not have to give the client a Product Disclosure Statement if:

(a) a Product Disclosure Statement for a financial product was given under section 1012B; and

(b) the relevant product was issued to:

(i) a person (the underwriter) named in that Product Disclosure Statement as an underwriter of the issue of the financial product; or

(ii) a person nominated by the underwriter; and

(c) the relevant product was issued to the underwriter, or the person nominated by the underwriter, at or about the time that persons who applied for the financial product under that Product Disclosure Statement were issued with that product; and

(d) the relevant product is in a class of financial products that were quoted securities of the issuer.

1012E Small scale offerings of managed investment and other prescribed financial products (20 issues or sales in 12 months)

(1) This section applies only to financial products that are:

(a) managed investment products; or

(b) financial products of a kind prescribed by regulations made for the purposes of this paragraph.

(2) Personal offers of financial products do not need a Product Disclosure Statement under this Part if:

(a) all of the financial products are issued by the same person (the issuer); and

(b) none of the offers results in a breach of the 20 purchasers ceiling (see subsections (6) and (7)); and

(3) Subsection (2) does not apply to an offer to which subsection 1012C(6) (sale amounting to indirect issue) or (8) (sale amounting to indirect sale by controller) applies.

Note: Under section 1012K, ASIC may make a determination aggregating the transactions of bodies that ASIC considers to be closely related.

(4) If subsection (2) applies to an offer of a financial product, a recommendation to a person to acquire a financial product in response to a personal offer of that kind does not need a Product Disclosure Statement under this Part.

(5) For the purposes of subsections (2) and (4), a personal offer is one that:

(a) may only be accepted by the person to whom it is made; and

(b) is made to a person who is likely to be interested in the offer, having regard to:

(i) previous contact between the person making the offer and that person; or

(ii) some professional or other connection between the person making the offer and that person; or

(iii) statements or actions by that person that indicate that they are interested in offers of that kind.

(6) An offer to issue, or arrange for the issue of, a financial product:

(a) results in a breach of the 20 purchasers ceiling if it results in the number of people to whom the issuer has issued financial products exceeding 20 in any 12 month period; and

(b) results in a breach of the $2 million ceiling if it results in the amount raised by the issuer from issuing financial products exceeding $2 million in any 12 month period.

(7) An offer by a person to sell a financial product:

(a) results in a breach of the 20 purchasers ceiling if it results in the number of people to whom the person sells financial products issued by the issuer of that financial product exceeding 20 in any 12 month period; and

(b) results in a breach of the $2 million ceiling if it results in the amount raised by the person from selling financial products issued by the issuer of that financial product exceeding $2 million in any 12 month period.

(8) In counting issues and sales of the financial products issued by the issuer, and the amount raised from issues and sales, for the purposes of subsection (2), disregard issues and sales that result from offers that:

(a) do not need a Product Disclosure Statement (otherwise than because of this section); or

(b) are made under a Product Disclosure Statement.

Note: Also see provisions on restrictions on advertising (section 1018A) and the anti‑hawking provisions in section 992A.

(9) In counting issues and sales of the financial products issued by the issuer, and the amount raised from issues and sales, for the purposes of subsection (2), disregard any issues and sales made by a body if:

(a) the body was a managed investment scheme (but not a registered scheme) at the time that the offer of interests in the scheme that resulted in the issues or sales was made; and

(b) the body became a registered scheme within 12 months after that offer was made; and

(c) the offer would not have required a Product Disclosure Statement (otherwise than because of this section) if the managed investment scheme had been a registered scheme at the time that the offer was made.

(10) In working out the amount of money raised by the issuer from issuing financial products, include the following:

(a) the amount payable for the financial products at the time when they are issued;

(b) if the financial product is an option—any amount payable on the exercise of the option;

(c) if the financial products carry a right to convert the financial product into other financial products—any amount payable on the exercise of that right.

(11) If a person relies on subsection (2) to make offers of financial products without a Product Disclosure Statement under this Part, the person must not issue, arrange for the issue of, or transfer, financial products without a Product Disclosure Statement under this Part if the issue or transfer would result in a breach of the 20 purchasers ceiling or the $2 million ceiling (see subsections (6), (7), (8), (9) and (10)).

(12) For the purposes of this section, an offer of a financial product is an offer to:

(a) issue the financial product; or

(b) arrange for the issue of the financial product; or

1012F Product Disclosure Statement for certain superannuation products may be provided later

In a recommendation situation or an issue situation in which the financial product is a superannuation product of a kind specified in regulations made for the purposes of this section, the regulated person:

(a) need not give the client the Product Disclosure Statement at or before the time when it would otherwise be required to be given; and

(b) must give the client the Product Disclosure Statement as soon as is reasonably practicable and in any event within 3 months after the product is issued to the client; and

(c) need not give the client the Product Disclosure Statement at all if the client ceases to be a member of the superannuation fund concerned before the regulated person is required to give the Product Disclosure Statement under paragraph (b).

1012G Product Disclosure Statement may sometimes be provided later

(1) The regulated person may deal with a financial product under this section only if:

(a) the financial product is one for which an application form is not required under section 1016A and section 1019B (cooling off period) will apply if the client enters into a legal obligation to acquire the product pursuant to the recommendation or offer that constitutes the relevant conduct; or

(b) the financial product is:

(i) a basic deposit product; or

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

(iii) a financial product of a kind prescribed by regulations made for the purposes of this subparagraph.

(2) In a recommendation situation or an issue situation, the regulated person need not give the client a Product Disclosure Statement for the financial product at or before the time when it would otherwise be required to be given if:

(a) the client expressly instructs the regulated person that they require:

(i) in a recommendation situation—the advice constituting the recommendation; or

(ii) in an issue situation—the financial product;

to be provided or issued immediately, or by a specified time; and

(b) it is not reasonably practicable, while complying with the client’s instructions, to give the client the Product Disclosure Statement at or before the time when it would otherwise be required to be given.

The regulated person must comply with subsection (3) instead.

(3) The regulated person must:

(a) at or before the time referred to in paragraph (2)(b), orally communicate the following information to the client:

(i) the name and contact details of the issuer of the financial product; and

(ii) information about the essential features of the financial product; and

(iii) the information that would be required to be in a Product Disclosure Statement for the financial product by paragraphs 1013D(1)(c), (d), (g) and (i); and

(b) give the client the Product Disclosure Statement as soon as practicable after that time, and in any event not later than:

(i) the time when the confirmation requirement (if applicable) is complied with; or

(ii) the end of the fifth day after the day on which the financial product was issued or sold to the client.

(3A) The information referred to in paragraph (3)(a) must be communicated in a clear, concise and effective manner.

(4) For the purposes of paragraph (3)(b), the confirmation requirement is complied with when:

(a) the client receives confirmation, as mentioned in paragraph 1017F(5)(a), of the transaction by which they acquired the financial product; or

(b) confirmation of that transaction is available to the client by a facility as mentioned in paragraph 1017F(5)(b).

1012H Obligation to take reasonable steps to ensure that Product Disclosure Statement is given to person electing to be covered by group financial product

(1) This section covers the situation in which a financial product:

(a) is issued to a person; and

(b) covers, or is designed to cover, a group of people; and

(2) The issuer must take reasonable steps to ensure that the new group member is given a Product Disclosure Statement for the financial product in accordance with this Division before the new group member makes an election to be covered by the financial product.

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

(3) For the purposes of this section, a person is covered by a financial product if benefits are, or may be, provided under the financial product directly to:

(a) the person; or

(b) a relative of the person; or

1012I Obligation to give employer a Product Disclosure Statement in relation to certain superannuation products and RSA products

(1) At or before the time when a person (the applicant) becomes a standard employer‑sponsor of a superannuation entity, the person (the issuer) who is to provide the superannuation products to the applicant’s employees must give the applicant a Product Disclosure Statement in accordance with this Division for each of those superannuation products.

(2) If:

(a) a person (the applicant) applies for the issue of an RSA product to the employee; and

(b) the applicant has not previously applied to the RSA provider for the issue to any employee of an RSA product of the same kind;

the person (the issuer) who is to issue the RSA product to the employee must, at or before the time when the RSA product is issued to the employee, give the applicant a Product Disclosure Statement in accordance with this Division for the RSA product.

(2A) If:

(a) a trustee (the applicant), under Part 24 of the Superannuation Industry (Supervision) Act 1993, applies on behalf of a person for the issue of an interest in a relevant superannuation entity; and

(b) the applicant has not previously applied under that Part for the issue of an interest in that entity on behalf of any person;

the person (the issuer) who is to issue the interest to the person must, at or before the time when the interest is issued to the person, give the applicant a Product Disclosure Statement in accordance with this Division for the interest.

(2B) If:

(a) a trustee (the applicant), under Part 9 of the Retirement Savings Accounts Act 1997, applies on behalf of a person for the issue of an interest in a relevant superannuation entity; and

(b) the applicant has not previously applied under that Part for the issue of an interest in that entity on behalf of any person;

(3) The issuer does not have to give the applicant a Product Disclosure Statement under subsection (1), (2), (2A) or (2B) for a financial product if:

(a) the applicant has already received a Product Disclosure Statement for that financial product that contains all of the information that the first‑mentioned Product Disclosure Statement would be required to contain; or

(b) the issuer believes on reasonable grounds that paragraph (a) applies.

Note: Information in a Supplementary Product Disclosure Statement is taken to be contained in the Product Disclosure Statement it supplements (see section 1014D).

(4) The issuer need not give the applicant a Product Disclosure Statement under subsection (1), (2), (2A) or (2B) in the circumstances specified in the regulations.

(5) In this section:

(a) terms used in subsection (1) that are defined for the purposes of the Superannuation Industry (Supervision) Act 1993 have the same meanings as in that Act; and

(b) terms used in subsection (2) that are defined for the purposes of the Retirement Savings Accounts Act 1997 have the same meanings as in that Act; and

1012IA Treatment of arrangements under which a person can instruct another person to acquire a financial product

Definitions

(1) In this section:

acquirer, in relation to a custodial arrangement, has the meaning given by the definition of custodial arrangement.

client, in relation to a custodial arrangement, has the meaning given by the definition of custodial arrangement.

custodial arrangement means an arrangement between a person (the provider) and another person (the client) (whether or not there are also other parties to the arrangement) under which:

(a) the client is, or is entitled, to give an instruction that a particular financial product, or a financial product of a particular kind, is to be acquired; and

(b) if the client gives such an instruction, a person (the acquirer), being the provider or a person with whom the provider has or will have an arrangement, must (subject to any discretion they have to refuse) acquire the financial product, or a financial product of that kind; and

(c) if the acquirer acquires the financial product, or a financial product of that kind, pursuant to an instruction given by the client, either:

(i) the product is to be held on trust for the client or another person nominated by the client; or

(ii) the client, or another person nominated by the client, is to have rights or benefits in relation to the product or a beneficial interest in the product, or in relation to, or calculated by reference to, dividends or other benefits derived from the product.

instruction includes a direction or request.

provider, in relation to a custodial arrangement, has the meaning given by the definition of custodial arrangement.

regulated acquisition means an acquisition of a financial product pursuant to an instruction by the client under a custodial arrangement, being an acquisition:

(a) by way of issue by the issuer (the regulated person); or

(b) pursuant to a sale by a person (the regulated person) in circumstances described in subsection 1012C(5), (6) or (8).

regulated person, in relation to a regulated acquisition of a financial product, has the meaning given by paragraph (a) or (b) (as the case requires) of the definition of regulated acquisition.

Obligation on provider to give client a PDS

(2) Before a regulated acquisition of a financial product occurs pursuant to an instruction given by the client under a custodial arrangement, the provider must give the client a Product Disclosure Statement for the product if a Product Disclosure Statement for the product would, if there were an equivalent direct acquisition by the client, be required by subsection 1012B(3) or 1012C(3) (see subsection (3) of this section) to be given to the client by the regulated person before that acquisition occurred. For this purpose, an equivalent direct acquisition is an acquisition that would occur if:

(a) the product were instead being offered for issue or sale direct to the client by the regulated person for the same price (or for the appropriate proportion of that price, if the transaction for the regulated acquisition also covers other products); and

(b) the circumstances of that issue or sale to the client were otherwise the same as those in which the regulated acquisition will occur.

Determining whether a PDS would have to be given for an equivalent direct acquisition

(3) The following provisions apply for the purpose of determining whether the regulated person would be required by subsection 1012B(3) or 1012C(3) to give the client a Product Disclosure Statement for the financial product:

(a) the effect of the provisions referred to in subsection 1012B(5) or 1012C(10), as the case requires, as they have effect subject to the following paragraphs, must be taken into account;

(b) subsections 1012D(1), (2) and (2A) apply as if references in those subsections to the regulated person’s belief in relation to a matter were instead references to the provider’s belief in relation to that matter;

(c) subsections 1012D(2) and (3) apply as if references to the client already holding a financial product of the same kind also included a reference to a person already holding a financial product of the same kind as a result of an instruction given by the client under a custodial arrangement;

(d) sections 1012E and 1012F are to be disregarded;

(e) section 1012G has effect in accordance with subsection (4).

Modification of section 1012G

(4) The following provisions apply in relation to section 1012G:

(a) in determining for the purposes of subsection (2) whether the regulated person would be required by subsection 1012B(3) or 1012C(3) to give the client a Product Disclosure Statement for the financial product, subsection 1012G(2) applies as if the reference to the client instructing the regulated person (in an issue situation) that they require the financial product to be provided or issued immediately, or by a specified time, were instead a reference to the client instructing the provider that they require the financial product to be acquired immediately, or by a specified time;

(b) if, because of subsection 1012G(2) as it applies because of paragraph (a) of this subsection, the provider does not have to give the client a Product Disclosure Statement for a financial product before a regulated acquisition of the financial product occurs pursuant to an instruction given by the client under a custodial arrangement:

(i) subsection 1012G(2) applies in relation to the provider, the client and the regulated acquisition as if the obligation it imposes to comply with subsection 1012G(3) were imposed on the provider; and

(ii) subsection 1012G(3) applies in relation to the provider, the client and the regulated acquisition as if the reference to the regulated person were instead a reference to the provider, as if subparagraph 1012G(3)(b)(i) were omitted and as if the reference in subparagraph 1012G(3)(b)(ii) to the day on which the financial product was issued or sold to the client were instead a reference to the day on which the regulated acquisition occurs.

Modification of section 1013A

(5) Section 1013A applies in relation to a regulated acquisition as if:

(a) paragraph 1013A(1)(b) also covered a Product Disclosure Statement that is required to be given by subsection (2) of this section in relation to an acquisition covered by paragraph (a) of the definition of regulated acquisition in subsection (1) of this section; and

(b) paragraph 1013A(2)(b) also covered a Product Disclosure Statement that is required to be given by subsection (2) of this section in relation to an acquisition covered by paragraph (b) of the definition of regulated acquisition in subsection (1) of this section.

Provider is not an agent for the purposes of section 1015C

(6) For the purposes of the application of section 1015C in relation to a regulated acquisition, the provider in relation to the relevant custodial arrangement is taken not to be an agent of the client.

Provider is covered by sections 1015E, 1021F and 1021I

(7) Sections 1015E, 1021F and 1021I apply in relation to a regulated acquisition as if the references to a regulated person were instead references to the provider in relation to the relevant custodial arrangement.

Regulations may provide for other modifications

(8) The regulations may provide for other modifications of provisions of this Part that are to have effect in relation to regulated acquisitions.

1012J Information must be up to date

The information in a Product Disclosure Statement must be up to date as at the time when it is given.

Note: A Supplementary Product Disclosure Statement containing updated information may be given with a Product Disclosure Statement that has become out of date. The updated information is taken to be included in the Product Disclosure Statement (see section 1014D).

1012K Anti‑avoidance determinations

(1) ASIC may determine in writing that a number of different bodies are closely related and that their transactions should be aggregated for the purposes of this Subdivision. If ASIC does so:

(a) an issue, sale or transfer of financial products of any other bodies is taken to also be an issue, sale or transfer of the financial products of each of the other bodies by those bodies; and

(b) any money received from an issue, sale or transfer of financial products of any of the bodies is taken to also be received by each of the other bodies from an issue, sale or transfer of its own financial products.

ASIC must give written notice of the determination to each of the bodies.

(2) ASIC may determine in writing that the transactions of a body and of a person who controls the body should be aggregated for the purposes of this Subdivision. If ASIC does so:

(a) an issue of financial products of the body is taken to also be the transfer of the financial products by the controller; and

(b) any money received from an issue of financial products of the body is taken to also be received by the controller from a transfer of the financial products; and

(c) a sale or transfer of financial products of the body by the controller is taken to also be the issue of the financial products by the body; and

(d) any money received from a sale or transfer of financial products of the body by the controller is taken to also be received by the body from an issue of the financial products.

ASIC must give written notice of the determination to the body and the controller.

Subdivision C—Preparation and content of Product Disclosure Statements

1013A Who must prepare Product Disclosure Statement

(1) A Product Disclosure Statement that:

(a) is required to be given by section 1012A (otherwise than in a situation in which the recommendation concerned relates to an offer described in subsection 1012C(3) or (4)); or

(b) is required to be given by section 1012B; or

(d) is required to be given by section 1012I;

must be a document that has been prepared by the issuer of the financial product. A Product Disclosure Statement of this kind is in this Division referred to as an issue Statement.

(2) A Product Disclosure Statement that:

(a) is required to be given by section 1012A in a situation in which the recommendation concerned relates to an offer described in subsection 1012C(3) or (4)); or

(b) is required to be given by section 1012C;

must be a document that has been prepared by the person making the offer to sell the financial product. A Product Disclosure Statement of this kind is in this Division referred to as a sale Statement.

(3) The person by whom, or on whose behalf, a Product Disclosure Statement for a financial product is required to be prepared is, in this Division, referred to as the responsible person for the financial product.

(4) For the purposes of this Part, a Product Disclosure Statement prepared on behalf of a person is taken to be prepared by the person.

1013B Title of Product Disclosure Statement

(1) The title “Product Disclosure Statement” must be used on the cover of, or at or near the front of, a Product Disclosure Statement.

(2) In any other part of a Product Disclosure Statement, “Product Disclosure Statement” may be abbreviated to “PDS”.

1013C Product Disclosure Statement content requirements

(1) A Product Disclosure Statement:

(a) must include the following statements and information required by this Subdivision:

(i) the statements and information required by section 1013D; and

(ii) the information required by section 1013E; and

(iii) the information required by the other provisions of this Subdivision; and

(b) may also:

(i) include other information; or

(ii) refer to other information that is set out in another document.

Note: A Supplementary Product Disclosure Statement containing additional information may be given with a Product Disclosure Statement that does not contain all the required information. The additional information is taken to be included in the Product Disclosure Statement (see section 1014D).

(2) The information required by sections 1013D and 1013E need only be included in the Product Disclosure Statement to the extent to which it is actually known to:

(a) the responsible person; and

(b) in the case of a sale Statement—the issuer of the financial product; and

(d) any person:

(i) named in the Statement as a financial services licensee providing services in relation to the issue or sale of the financial product; and

(ii) who participated in any way in the preparation of the Statement; and

(e) any person who has given a consent referred to in section 1013K in relation to a statement included in the Statement; and

(f) any person named in the Statement with their consent as having performed a particular professional or advisory function; and

(g) if any of the above persons is a body corporate—any director of that body corporate.

(3) The information included in the Product Disclosure Statement must be worded and presented in a clear, concise and effective manner.

(4) The responsible person may include in the Product Disclosure Statement a statement about the association between the financial product and another person.

(5) The responsible person must not include a statement about the association between the financial product and a person if:

(a) the statement creates the impression that the financial product is issued or sold by that other person; and

(b) the person has not issued or sold the product.

(6) The responsible person must not include a statement about the association between the financial product and a person if:

(a) the statement creates the impression that the financial product is guaranteed or underwritten by that other person; and

(b) the person has not guaranteed or underwritten the product.

(7) If the Product Disclosure Statement states that a person provides, or is to provide, services in relation to the financial product, the Product Disclosure Statement must clearly distinguish between the respective roles of that person and the issuer or seller of the financial product.

1013D Product Disclosure Statement content—main requirements

(1) Subject to this section, subsection 1013C(2) and sections 1013F and 1013FA, a Product Disclosure Statement must include the following statements, and such of the following information as a person would reasonably require for the purpose of making a decision, as a retail client, whether to acquire the financial product:

(a) a statement setting out the name and contact details of:

(i) the issuer of the financial product; and

(ii) if the Statement is a sale Statement—the seller; and

(b) information about any significant benefits to which a holder of the product will or may become entitled, the circumstances in which and times at which those benefits will or may be provided, and the way in which those benefits will or may be provided; and

(d) information about:

(i) the cost of the product; and

(ii) any amounts that will or may be payable by a holder of the product in respect of the product after its acquisition, and the times at which those amounts will or may be payable; and

(iii) if the amounts paid in respect of the financial product and the amounts paid in respect of other financial products are paid into a common fund—any amounts that will or may be deducted from the fund by way of fees, expenses or charges; and

(e) if the product will or may generate a return to a holder of the product—information about any commission, or other similar payments, that will or may impact on the amount of such a return; and

(f) information about any other significant characteristics or features of the product or of the rights, terms, conditions and obligations attaching to the product; and

(g) information about the dispute resolution system that covers complaints by holders of the product and about how that system may be accessed; and

(h) general information about any significant taxation implications of financial products of that kind; and

(i) information about any cooling‑off regime that applies in respect of acquisitions of the product (whether the regime is provided for by a law or otherwise); and

(j) if the product issuer (in the case of an issue Statement) or the seller (in the case of a sale Statement) makes other information relating to the product available to holders or prospective holders of the product, or to people more generally—a statement of how that information may be accessed; and

(k) any other statements or information required by the regulations; and

(l) if the product has an investment component—the extent to which labour standards or environmental, social or ethical considerations are taken into account in the selection, retention or realisation of the investment; and

(m) unless in accordance with the regulations, for information to be disclosed in accordance with paragraphs (b), (d) and (e), any amounts are to be stated in dollars.

(2) For the purposes of paragraph (1)(d), an amount will or may be payable in respect of a financial product by the holder of the financial product if:

(a) the holder will or may have to pay an amount in respect of the product; or

(b) an amount will or may be deducted from:

(i) a payment to be made by the holder; or

(ii) a payment to be made to the holder; or

(iii) an amount held on the holder’s behalf under the financial product; or

It includes an amount that the holder will or may have to pay, or that will or may be deducted or debited, as a fee, expense or charge in relation to a particular transaction in relation to the financial product.

(2A) For the purposes of paragraph (1)(l), products which have an investment component include superannuation products, managed investment products, foreign passport fund products and investment life insurance products.

(3) Subsection (1) requires information to be included in the Product Disclosure Statement only to the extent to which the requirement is applicable to the financial product. The Product Disclosure Statement does not need to indicate that a particular requirement is not applicable to the financial product.

(4) The regulations may:

(a) provide that a provision of subsection (1) does not apply in a particular situation; or

(b) provide that particular information is not required by a provision of subsection (1), either in a particular situation or generally; or

(c) provide a more detailed statement of the information that is required by a provision of subsection (1), either in a particular situation or generally.

1013DA Information about ethical considerations etc.

ASIC may develop guidelines that must be complied with where a Product Disclosure Statement makes any claim that labour standards or environmental, social or ethical considerations are taken into account in the selection, retention or realisation of the investment.

1013E General obligation to include other information that might influence a decision to acquire

Subject to subsection 1013C(2) and sections 1013F and 1013FA, a Product Disclosure Statement must also contain any other information that might reasonably be expected to have a material influence on the decision of a reasonable person, as a retail client, whether to acquire the product.

1013F General limitations on extent to which information is required to be included

(1) Despite anything in section 1013D or 1013E, information, or a statement containing information, is not required to be included in a Product Disclosure Statement if it would not be reasonable for a person considering, as a retail client, whether to acquire the product to expect to find the information in the Statement.

(2) In considering whether it would not be reasonable for a person considering, as a retail client, whether to acquire the product to expect to find particular information in the Statement, the matters that may be taken into account include, but are not limited to:

(a) the nature of the product (including its risk profile); and

(b) the extent to which the product is well understood by the kinds of person who commonly acquire products of that kind as retail clients; and

(d) if the product is an ED security that is not a continuously quoted security—the effect of the following provisions:

(i) Chapter 2M as it applies to disclosing entities;

(ii) sections 674 and 675; and

(e) the way in which the product is promoted, sold or distributed; and

(f) any other matters specified in the regulations.

1013FA Information not required to be included in PDS for continuously quoted securities

(1) This section applies to a Product Disclosure Statement that relates to a continuously quoted security.

(2) Despite anything in section 1013D, 1013E or 1013F, information is not required to be included in the Product Disclosure Statement if:

(a) for a continuously quoted security that is not a security of a notified foreign passport fund—the information is included in any of the following documents:

(i) the annual financial report most recently lodged with ASIC by the issuer of the product;

(ii) any half‑year financial report lodged with ASIC by the issuer of the product after the lodgment of that annual financial report and before the date of the Product Disclosure Statement;

(iii) any continuous disclosure notices given by the issuer of the product after the lodgment of that annual financial report and before the date of the Product Disclosure Statement; and

(aa) for a continuously quoted security of a notified foreign passport fund—the information is included in any of the following documents:

(i) a copy of a report for the fund for the most recent financial year for the fund, prepared in accordance with the financial reporting requirements applying to the fund under the Passport Rules for the home economy for the fund;

(ii) a copy of an auditor’s report that relates to the report mentioned in subparagraph (i);

(iii) any continuous disclosure notices given by the issuer of the product after the lodgment of the report mentioned in subparagraph (i) and before the date of the Product Disclosure Statement; and

(b) the Product Disclosure Statement:

(i) states that as a disclosing entity, the issuer of the product is subject to regular reporting and disclosure obligations; and

(ii) informs people of their right to obtain a copy of any of the documents referred to in paragraph (a) or (aa) (as the case requires).

If the Product Disclosure Statement informs people of their right to obtain a copy of the document, the issuer of the product must give a copy of the document free of charge to anyone who asks for it.

(3) ASIC may determine that this section does not apply to Product Disclosure Statements for continuously quoted securities if ASIC is satisfied that in the previous 12 months:

(a) the issuer of the continuously quoted securities contravened:

(i) the provisions of Chapter 2M; or

(ii) subsection 674(2) or 675(2); or

(iii) subsection 1012DAA(10) or 1012DA(9); or

(iv) section 1308 as it applies to a notice under subsection 1012DAA(2) or 1012DA(5); or

(b) the responsible person for the Product Disclosure Statement contravened section 1016E, 1021D, 1021E or 1021J.

(4) The determination must be made in writing and ASIC must publish a copy of the determination in the Gazette.

1013G Product Disclosure Statement must be dated

A Product Disclosure Statement must be dated. The date must be:

(a) if a copy of the Product Disclosure Statement has been lodged with ASIC (see section 1015B)—the date on which it was so lodged; or

(b) in any other case—the date on which the Product Disclosure Statement was prepared or its preparation was completed.

1013GA Extra requirements if Product Disclosure Statement relates to foreign passport fund products

(1) This section applies to a Product Disclosure Statement that relates to foreign passport fund products.

(2) The Product Disclosure Statement must:

(a) identify the home economy for the notified foreign passport fund to which the foreign passport fund products relate; and

(b) include a statement that:

(i) the operation of the fund is regulated by the law of the home economy for the fund; and

(ii) the operator of the fund and the custodian of the assets of the fund are regulated under the law of the home economy for the fund; and

(iii) the rights and remedies available to a person who acquires the foreign passport fund product may differ from the rights and remedies available in relation to a registered scheme; and

(iv) information made available to members of the fund in the home economy will from time to time be made available to Australian members of the fund by posting the information on the fund’s website; and

(c) include an outline of the main rights and remedies available under the law of the home economy for the fund to persons who acquire the foreign passport fund product in this jurisdiction; and

(d) include an outline of how information mentioned in subparagraph (b)(iv) may be accessed by Australian members of the fund; and

(e) include a statement that the rights of a member of the fund on the fund being wound up are mainly determined under the constitution for the fund and the law of the home economy for the fund.

1013H Requirements if Product Disclosure Statement states or implies that financial product will be able to be traded

If a Product Disclosure Statement states or implies that the financial product will be able to be traded on a financial market (whether in Australia or elsewhere), the Statement must state that:

(a) the product is able to be traded on that market; or

(b) an application has been made to the operator of that market for the taking of such action as is necessary to enable the product to be traded on that market; or

(c) an application of a kind referred to in paragraph (b) will be made to the operator of that market within 7 days after the date of the Statement.

1013I Extra requirements if Product Disclosure Statement relates to managed investment products that are ED securities

(1) This section applies to a Product Disclosure Statement that relates to managed investment products that are ED securities.

(2) The Product Disclosure Statement must include a statement that:

(a) as a disclosing entity, the scheme is subject to regular reporting and disclosure obligations; and

(b) copies of documents lodged with ASIC in relation to the scheme may be obtained from, or inspected at, an ASIC office.

(3) The Product Disclosure Statement must either:

(a) inform people of their right to obtain a copy of the following documents:

(i) the annual financial report most recently lodged with ASIC by the scheme;

(ii) any half‑year financial report lodged with ASIC by the scheme after the lodgment of that annual financial report and before the date of the Product Disclosure Statement;

(iii) any continuous disclosure notices given by the scheme after the lodgment of that annual report and before the date of the Product Disclosure Statement; or

(b) include, or be accompanied by, a copy of the relevant document or documents.

(4) If:

(a) the Product Disclosure Statement informs people of their right to obtain a copy of a document referred to in subsection (3); and

(b) a person asks the issuer (in the case of an issue Statement) or the seller (in the case of a sale Statement) for a copy of the document;

the issuer or seller must give (see subsection (5)) the person a copy of the document free of charge as soon as practicable, and in any event within 5 days, after receiving the person’s request.

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

(5) In subsection (4), give means give in a way that would satisfy the requirements of section 1015C if the copy of the document were a Statement to which that section applied.

1013IA Extra requirements if Product Disclosure Statement relates to foreign passport fund products that are ED securities

(1) This section applies to a Product Disclosure Statement that relates to foreign passport fund products that are ED securities.

(2) The Product Disclosure Statement must include a statement that:

(a) as a disclosing entity, the fund is subject to regular reporting and disclosure obligations; and

(b) copies of documents lodged with ASIC in relation to the fund may be obtained from, or inspected at, an ASIC office.

(3) The Product Disclosure Statement must either:

(a) inform people of their right to obtain a copy of the following documents:

(i) a copy of a report for the most recent financial year for the fund, prepared in accordance with the financial reporting requirements applying to the fund under the Passport Rules for the home economy for the fund;

(ii) a copy of each auditor’s report that relates to the report mentioned in subparagraph (i); or

(b) include, or be accompanied by, a copy of that document or those documents.

(4) Subsections (5) and (6) apply if:

(a) the Product Disclosure Statement informs people of their right to obtain a copy of a document referred to in subsection (3); and

(b) a person asks the issuer (in the case of an issue Statement) or the seller (in the case of a sale Statement) for a copy of the document.

(5) The issuer or seller must give (see subsection (6)) the person a copy of the document:

(a) free of charge; and

(b) as soon as practicable, and in any event within 5 days, after receiving the person’s request; and

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

(6) In subsection (5), give means give in a way that would satisfy requirements of section 1015C if the copy of the document were a Statement to which that section applied.

1013J Requirements if Statement has been lodged with ASIC

A Product Disclosure Statement, a copy of which has been lodged with ASIC (see section 1015B), must include a statement that:

(a) a copy of the document has been lodged with ASIC; and

(b) ASIC takes no responsibility for the content of the document.

1013K Requirements relating to consents to certain statements

(1) A Product Disclosure Statement must only include a statement made by a person, or a statement said in the Product Disclosure Statement to be based on a statement made by a person, if:

(a) the person has consented to the statement being included in the Product Disclosure Statement in the form and context in which it is included; and

(b) the Product Disclosure Statement states that the person has given this consent; and

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

(2) The person who prepared the Product Disclosure Statement must not, without reasonable excuse, fail to keep the consent, or a copy of it, for the period, and in the manner, required by the regulations.

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

1013L Product Disclosure Statement may consist of 2 or more separate documents given at same time

(1) Subject to this section, a Product Disclosure Statement may be made up of 2 or more separate documents that are given at the same time.

(2) Each of the documents must have on the cover of the document, or at or near the front of the document, a statement:

(a) to the effect that the document is part of a Product Disclosure Statement; and

(b) that (subject to subsection (3)) identifies the other documents that make up the Product Disclosure Statement.

(3) If there are or may be different versions of a document referred to in paragraph (2)(b), the statement required by subsection (2) does not have to identify any particular one of those versions and may instead identify the document generically.

Note: For example, if a Product Disclosure Statement is made up of a core document that is not updated very frequently, and a separate document providing information about remuneration that is updated more frequently:

(a) the statement in the core document need only refer to the fact that it, and a separate document about remuneration, make up the Product Disclosure Statement; and

(b) the statement in the document about remuneration need only refer to the fact that it, and a separate document about all other required matters, make up the Product Disclosure Statement.

(4) The requirement of section 1013B (title of Product Disclosure Statement) is taken to be satisfied if the title “Product Disclosure Statement” is used on the cover of, or at or near the front of, at least one of the documents that make up the Product Disclosure Statement.

(5) The requirement of section 1013G (dating of Product Disclosure Statement) must be separately complied with in relation to each of the documents. If, for any purpose, a single date needs to be determined as the date of the Product Disclosure Statement as a whole, that date is the most recent of the dates of those documents.

(6) Section 1015E applies to an alteration to one of the documents as though the reference in that section to the date specified in the Product Disclosure Statement were a reference to the date specified in the document.

(7) The regulations may impose additional requirements to be complied with if a Product Disclosure Statement is made up of 2 or more documents.

1013M Combining a Product Disclosure Statement and a Financial Services Guide in a single document

For provisions about combining a Product Disclosure Statement and a Financial Services Guide in a single document, see section 942DA and regulations made for the purposes of that section.

Subdivision D—Supplementary Product Disclosure Statements

1014A What a Supplementary Product Disclosure Statement is

A Supplementary Product Disclosure Statement is a document by which a person who has prepared a Product Disclosure Statement (the PDS) can:

(a) correct a misleading or deceptive statement in the PDS; or

(b) correct an omission from the PDS of information it is required to contain; or

(d) change a statement of a kind referred to in paragraph 1016E(1)(a) or (b).

Note: In certain circumstances a Replacement Product Disclosure Statement may be prepared instead of a Supplementary Product Disclosure Statement (see Subdivision DA).

1014B Title of Supplementary Product Disclosure Statement

(1) The title “Supplementary Product Disclosure Statement” must be used on the cover of, or at or near the front of, a Supplementary Product Disclosure Statement.

(2) In any other part of a Supplementary Product Disclosure Statement, “Supplementary Product Disclosure Statement” may be abbreviated to “SPDS”.

1014C Form of Supplementary Product Disclosure Statement

At the beginning of a Supplementary Product Disclosure Statement there must be:

(a) a statement that it is a Supplementary Product Disclosure Statement; and

(b) an identification of the Product Disclosure Statement that it supplements; and

(c) a statement that it is to be read together with that Product Disclosure Statement and any other specified Supplementary Disclosure Statements.

1014D Effect of giving person a Supplementary Product Disclosure Statement

If:

(a) a person is given a Product Disclosure Statement (the PDS); and

(b) at the same time, or later, they are given a Supplementary Product Disclosure Statement (the SPDS) that supplements the PDS;

the PDS is taken, from when the SPDS is given to the person, to include the information and statements contained in the SPDS.

1014E Situation in which only a Supplementary Product Disclosure Statement need be given

If:

(a) apart from this section, a person would be required to give another person (the client) a Product Disclosure Statement (the new PDS) relating to a financial product; and

(b) the client has, because of some previous conduct, already received a Product Disclosure Statement (the earlier PDS) relating to the financial product; and

the person may, instead of giving the client the new PDS, give the client a Supplementary Product Disclosure Statement that contains the additional information.

1014F Application of other provisions in relation to Supplementary Product Disclosure Statements

Sections 1013A, 1013G, 1013H, 1013J and 1013K, and subsections 1013C(3) to (7), apply in relation to a Supplementary Product Disclosure Statement in the same way as they apply to a Product Disclosure Statement.

Subdivision DA—Replacement Product Disclosure Statements

1014G Application of this Subdivision—stapled securities

This Subdivision applies if:

(a) a Product Disclosure Statement has been lodged in relation to an offer for the issue or sale of an interest in a managed investment scheme; and

(b) the interest can only be transferred together with one or more securities; and

1014H What a Replacement Product Disclosure Statement is

A Replacement Product Disclosure Statement is a document that replaces the Product Disclosure Statement (the earlier PDS) mentioned in paragraph 1014G(a) in order to:

(a) correct a misleading or deceptive statement in the earlier PDS; or

(b) correct an omission from the earlier PDS of information it is required to contain; or

(d) change a statement of a kind referred to in paragraph 1016E(1)(a) or (b).

1014J Consequences of lodging a Replacement Product Disclosure Statement

If a Replacement Product Disclosure Statement is prepared in accordance with section 1014K and lodged with ASIC as provided by Subdivision E (in its application under section 1014L), a reference to a Product Disclosure Statement is taken to be a reference to the Replacement Product Disclosure Statement for the purposes of the application of this Act to events that occur after the lodgment.

Note: This section means, for example, that offers made after lodgment of the Replacement Product Disclosure Statement must be accompanied by copies of the Replacement Product Disclosure Statement and not the earlier PDS.

1014K Form, content and preparation of Replacement Product Disclosure Statements

(1) At the beginning of a Replacement Product Disclosure Statement, there must be:

(a) a statement that it is a Replacement Product Disclosure Statement; and

(b) an identification of the Product Disclosure Statement it replaces.

(2) The title “Replacement Product Disclosure Statement” must be used on the cover of, or at or near the front of, a Replacement Product Disclosure Statement.

(3) In any other part of a Replacement Product Disclosure Statement, “Replacement Product Disclosure Statement” may be abbreviated to “RPDS”.

(4) Otherwise, section 1012J and Subdivision C (apart from section 1013B) apply in relation to a Replacement Product Disclosure Statement in the same way as they apply to a Product Disclosure Statement.

Note: Section 1012J provides that the information in a Product Disclosure Statement must be up to date at the time it is given. Subdivision C deals with the preparation and content of Product Disclosure Statements.

1014L Giving, lodgment and notice of Replacement Product Disclosure Statements

Subdivision E applies in relation to a Replacement Product Disclosure Statement in the same way as it applies to a Product Disclosure Statement that is required to be lodged with ASIC under section 1015B.

Subdivision E—Other requirements relating to Product Disclosure Statements and Supplementary Product Disclosure Statements

1015A Subdivision applies to Product Disclosure Statements and Supplementary Product Disclosure Statements

This Subdivision applies to Product Disclosure Statements and to Supplementary Product Disclosure Statements. Both kinds of document are referred to in this Subdivision as a Statement.

1015B Some Statements must be lodged with ASIC

(1) A copy of a Statement must have been lodged with ASIC (in accordance with the requirements of subsection (2) for consents) before the Statement is given to a person for the purposes of a provision of this Part if:

(a) the following subparagraphs apply:

(i) the financial product is a managed investment product; and

(ii) the Statement states or implies that the product will be able to be traded on a financial market; and

(iii) the Statement meets the requirements set out in section 1013H; or

(b) the financial product is a managed investment product that can be traded on a financial market; or

(ba) the financial product is:

(i) a managed investment product of an Australian passport fund; or

(ii) a foreign passport fund product; or

(c) the financial product is a financial product of a kind specified in regulations made for the purposes of this paragraph.

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

(2) The lodgment of a Statement in relation to a managed investment product with ASIC requires the consent of:

(a) whether it is an issue Statement or a sale Statement:

(i) if the responsible person is a body corporate—every director of the responsible person; or

(ii) otherwise—the responsible person; and

(b) if it is a sale Statement:

(i) if the issuer of the financial product concerned is a body corporate—every director of the issuer; or

(ii) otherwise—the issuer of the financial product concerned.

(3) The lodgment of a Statement in relation to a foreign passport fund product with ASIC requires the consent of:

(a) if the operator of the fund is a body corporate—every director of the operator; or

(b) otherwise—the responsible person.

1015C How a Statement is to be given

(1) A Statement:

(a) must be:

(i) given to a person, or the person’s agent, personally; or

(ii) sent to the person, or the person’s agent, at an address (including an electronic address) or fax number nominated by the person or the agent; and

(b) may be printed or be in electronic form.

(2) For the purposes of this section, the Statement is sent to a person at an address if, and only if:

(a) the Statement is sent to the address; and

(b) either:

(i) the envelope or other container in which the Statement is sent; or

(ii) the message that accompanies the Statement;

is addressed to the person.

(3) The Statement may be given or sent to the person’s agent only if the agent is not acting as the person’s agent in one of the following capacities:

(a) a financial services licensee;

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

(d) a person who is not required to hold an Australian financial services licence because the person is covered by:

(i) paragraph 911A(2)(j); or

(ii) an exemption in regulations made for the purposes of paragraph 911A(2)(k); or

(iii) an exemption specified by ASIC for the purposes of paragraph 911A(2)(l);

(e) a person who is required to hold an Australian financial services licence but who does not hold such a licence;

(f) an employee, director or other representative of a person referred to in paragraph (a), (b), (d) or (e).

(4) The regulations may provide for alternative ways of giving a Statement to a person.

(5) The regulations may specify requirements as to:

(a) the manner in which a Statement may be given to a person; and

(b) the presentation, structure and format for a Statement that is to be given in electronic form.

The giving of the Statement is not effective unless those requirements are satisfied.

1015D Notice, retention and access requirements for Statement that does not need to be lodged

(1) This section applies to a Statement if section 1015B does not require a copy of the Statement to be lodged with ASIC.

(2) The responsible person for the Statement (other than the trustee of a self‑managed superannuation fund) must lodge a notice with ASIC, in electronic form, advising of the occurrence of any of the following events as soon as practicable, and in any event within 5 business days, after the occurrence of the event:

(a) except in the case of a Supplementary Product Disclosure Statement—a copy of the Statement is first given to someone in a recommendation, issue or sale situation;

(b) a change is made to fees and charges set out in the Statement;

(c) the financial product to which the Statement relates ceases to be available to be recommended or offered to new clients in a recommendation, issue or sale situation.

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

Note 2: The fees and charges set out in a Product Disclosure Statement may be changed by a Supplementary Product Disclosure Statement (see section 1014A).

(3) The responsible person for the Statement must keep a copy of the Statement for the period of 7 years after the date of the Statement.

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

(4) During that period the responsible person:

(a) must make a copy of the Statement available to ASIC if asked to do so by ASIC; and

(b) must comply with any reasonable request from any other person for a copy of the Statement.

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

1015E Altering a Statement after its preparation and before giving it to a person

(1) A regulated person must not, in purported compliance with a provision of this Part, give a person a Statement that has been altered (otherwise than pursuant to paragraph (b)) after the date of the Statement if either or both of the following paragraphs applies:

(a) the alteration was not made by, or with the authority of, the issuer or seller, as the case requires, of the financial products;

(b) the alteration is a material alteration and the date of the Statement has not been changed to:

(i) if a copy of the altered Statement has been lodged with ASIC (see subsection (2))—the date on which it was so lodged; or

(ii) in any other case—the date on which the alteration was made.

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

(2) If the alteration is a material alteration to a Statement that has been lodged with ASIC under section 1015B, that section applies to the altered Statement as if it were a new Statement.

Subdivision F—Other rights and obligations related to Product Disclosure Statements

1016A Provisions relating to use of application forms

(1) In this section:

defective, in relation to a Product Disclosure Statement as at a particular time, means that the Product Disclosure Statement, if it had been given to a person at that time, would have been defective as defined in Subdivision A of Division 7.

Note: Information in a Supplementary Product Disclosure Statement is taken to be contained in the Product Disclosure Statement it supplements (see section 1014D).

eligible application, in relation to a restricted issue or restricted sale of a relevant financial product, means an application that satisfies the following requirements:

(a) the application is made using an application form; and

(b) the application form used to apply for the product:

(i) was included in, or accompanied, a Product Disclosure Statement (relating to the product) that was given to the applicant and that was not defective as at the time when the application was made; or

(ii) was copied, or directly derived, by the applicant from a form referred to in subparagraph (i); and

(c) all other applicable requirements (if any) in regulations made for the purposes of this paragraph are satisfied in relation to the application.

Note: Information in a Supplementary Product Disclosure Statement is taken to be contained in the Product Disclosure Statement it supplements (see section 1014D).

relevant financial product means:

(a) a managed investment product; or

(aa) a foreign passport fund product; or

(b) a superannuation product; or

(d) an RSA product; or

(db) a margin lending facility; or

(e) a financial product of a kind specified in regulations made for the purposes of this paragraph.

relevant superannuation entity means a superannuation entity of a kind specified in regulations made for the purposes of this definition.

restricted issue means an issue of a relevant financial product to a person as a retail client, other than an issue covered by either of the following paragraphs:

(a) an issue in a situation, or pursuant to an offer made in a situation, to which a subsection, other than subsection (1), of section 1012D applies; or

(b) an issue in a situation, or pursuant to an offer made in a situation, to which section 1012E or 1012F applies.

restricted sale means a sale of a relevant financial product pursuant to an offer that:

(a) is of a kind described in subsection 1012C(3) or (4); and

(b) is not made in a situation to which a subsection, other than subsection (1), of section 1012D applies.

RSA provider has the same meaning as in the Retirement Savings Accounts Act 1997.

standard employer‑sponsor has the same meaning as in the Superannuation Industry (Supervision) Act 1993.

standard employer‑sponsored fund has the same meaning as in the Superannuation Industry (Supervision) Act 1993.

standard employer‑sponsored member has the same meaning as in the Superannuation Industry (Supervision) Act 1993.

(2) A person (the issuer or seller) must only make a restricted issue or a restricted sale of a relevant financial product to a person (the recipient) if:

(a) the issue or sale is made pursuant to an eligible application made to the issuer or seller by the recipient; or

(b) it is a restricted issue in relation to which the following conditions are satisfied:

(i) the financial product is an interest in a relevant superannuation entity;

(ii) the interest is issued pursuant to an application made to the issuer by a standard employer‑sponsor of the entity on the recipient’s behalf;

(iii) if the application is the first application for the issue of a superannuation interest made to the issuer by the standard employer‑sponsor on behalf of any person—the application is an eligible application; or

(i) the financial product is an interest in a relevant superannuation entity;

(ii) the interest is issued pursuant to an application made to the issuer by another trustee under Part 24 of the Superannuation Industry (Supervision) Act 1993 on the recipient’s behalf;

(iii) if the application is the first application under Part 24 of that Act made to the issuer by the other trustee on behalf of any person—the application is an eligible application; or

(d) it is a restricted issue in relation to which the following conditions are satisfied:

(i) the financial product is an interest in a relevant superannuation entity;

(ii) the interest is issued pursuant to an application made to the issuer by an RSA provider under Part 9 of the Retirement Savings Accounts Act 1997 on the recipient’s behalf;

(iii) if the application is the first application under Part 9 of that Act made to the issuer by the RSA provider on behalf of any person—the application is an eligible application; or

(e) it is a restricted issue in relation to which the following conditions are satisfied:

(i) the financial product is an RSA product;

(ii) the interest is issued pursuant to an application made to the issuer by an employer (within the meaning of the Retirement Savings Accounts Act 1997) of the recipient;

(iii) if the application is the first application for the issue of an RSA product of that kind made to the issuer by the employer on behalf of any person—the application is an eligible application;

(iv) all other applicable requirements (if any) in regulations made for the purposes of this subparagraph are satisfied in relation to the application; or

(f) the issue or sale occurs in a situation covered by regulations made for the purposes of this paragraph.

Note 1: This subsection does not apply to an issue or sale pursuant to paragraph 1016E(2)(c) (see subsection 1016E(2C)).

Note 2: Failure to comply with this subsection is an offence (see subsection 1311(1)).

(3) The trustee of a relevant superannuation entity must only permit a person to become a standard employer‑sponsor of the entity if:

(a) the person applied to become a standard employer‑sponsor of the entity using an application form; and

(b) the application form used to apply to become a standard employer‑sponsor:

(i) was included in, or accompanied, a Product Disclosure Statement (relating to an interest in the entity) that was given to the person and that was not defective as at the time when the application was made; or

(ii) was copied, or directly derived, by the person from a form referred to in subparagraph (i).

Note 1: Information in a Supplementary Product Disclosure Statement is taken to be contained in the Product Disclosure Statement it supplements (see section 1014D).

Note 2: Failure to comply with this subsection is an offence (see subsection 1311(1)).

(4) The regulations may:

(a) provide for defences to offences based on subsection (2) or (3); and

(b) provide for additional offences relating to the receipt or non‑receipt of applications or application forms.

Note 1: A defendant bears an evidential burden in relation to a defence. See subsection 13.3(3) of the Criminal Code.

Note 2: For the limit on penalties for offences against the regulations, see paragraph 1364(2)(w).

1016B If Statement lodged with ASIC, financial product is not to be issued or sold before specified period

(1) If:

(a) a copy of a Product Disclosure Statement has been lodged with ASIC; and

(b) the financial product to which the Statement relates is not able to be traded on any financial market (whether in Australia or elsewhere);

the responsible person must not issue or sell a financial product, pursuant to an application made in response to the Statement, until the period of 7 days (or that period as extended under subsection (2)) after lodgment of the Statement has ended.

Note 1: This subsection does not apply to an issue or sale pursuant to paragraph 1016E(2)(c) (see subsection 1016E(2C)).

Note 2: Failure to comply with this subsection is an offence (see subsection 1311(1)).

(2) ASIC may extend the period by notice in writing to the responsible person. The period as extended must end no more than 14 days after lodgment.

(3) This section does not apply if the financial product to which the Product Disclosure Statement relates is:

(a) a managed investment product of an Australian passport fund; or

(b) a foreign passport fund product.

1016C Minimum subscription condition must be fulfilled before issue or sale

If a Product Disclosure Statement for a financial product states that a financial product to which the Statement relates will not be issued or sold unless:

(a) applications for a minimum number of financial products of that kind are received; or

(b) a minimum amount is raised;

the responsible person must not issue or sell a financial product of that kind, pursuant to an application made in response to the Statement, if that condition has not been satisfied. For the purpose of working out whether the condition has been satisfied, a person who has agreed to take a financial product as underwriter is taken to have applied for that product.

Note 1: Statements in a Supplementary Product Disclosure Statement are taken to be contained in the Product Disclosure Statement it supplements (see section 1014D).

Note 1A: This subsection does not apply to an issue or sale pursuant to paragraph 1016E(2)(c) (see subsection 1016E(2C)).

Note 2: Failure to comply with this section is an offence (see subsection 1311(1)).

1016D Condition about ability to trade on a market must be fulfilled before issue or sale

(1) If a Product Disclosure Statement for a financial product states or implies that a financial product to which the Statement relates will be able to be traded on a financial market (whether in Australia or elsewhere), the responsible person must only issue or sell a financial product of that kind, pursuant to an application made in response to the Statement, if:

(a) the product is able to be traded on that market; or

(b) an application has, within 7 days after the relevant date (see subsection (3)), been made to the operator of that market for the taking of such action as is necessary to enable financial products of that kind to be traded on that market.

Paragraph (b) ceases to apply to the financial product at the end of the period of 3 months starting on the relevant date.

Note 1: Statements in a Supplementary Product Disclosure Statement are taken to be contained in the Product Disclosure Statement it supplements (see section 1014D).

Note 1A: This subsection does not apply to an issue or sale pursuant to paragraph 1016E(2)(c) (see subsection 1016E(2C)).

Note 2: Failure to comply with this subsection is an offence (see subsection 1311(1)).

Issue or transfer void if quotation condition not fulfilled

(2) If a Product Disclosure Statement for a financial product states or implies that the financial product is to be quoted on a financial market (whether in Australia or elsewhere) and:

(a) an application has not, within 7 days after the relevant date (see subsection (3)), been made to the operator of that market for the taking of such action as is necessary to enable financial products of that kind to be traded on that market; or

(b) the product is not able to be traded on that market at the end of 3 months after the relevant date;

then:

(i) the issue or transfer is pursuant to an application made in response to the Statement; or

(ii) the person should have been given the Statement; and

(d) if:

(i) an issue or transfer of a financial product to a person is void because of paragraph (c); and

(ii) the responsible person received money from that person on account of the issue or transfer—the responsible person must, as soon as practicable, return the money to that person.

Note 1: Paragraphs (c) and (d) do not apply to an issue or sale pursuant to paragraph 1016E(2)(c) (see subsection 1016E(2C)).

Note 2: Failure to comply with paragraph (d) is an offence (see subsection 1311(1)).

The relevant date

(3) For the purposes of this section, the relevant date in relation to an express or implied statement is:

(a) if the statement is express or implied in a Product Disclosure Statement, disregarding the effect of section 1014D—the date of the Product Disclosure Statement; or

(b) if the statement is express or implied in a Supplementary Product Disclosure Statement—the date of the Supplementary Product Disclosure Statement; or

(c) if the statement is express or implied in a Replacement Product Disclosure Statement (whether or not it is express or implied in the earlier Product Disclosure Statement it replaces)—the date of the Replacement Product Disclosure Statement.

1016E Choices open to person making the offer if disclosure condition not met or Product Disclosure Statement defective

(1) This section applies if:

(a) a Product Disclosure Statement for a financial product states that a financial product to which the Statement relates will not be issued or sold unless:

(i) applications for a minimum number of financial products of that kind are received; or

(ii) a minimum amount is raised;

and that condition is not satisfied within 4 months after the relevant date (see subsections (3) and (4)); or

(b) a Product Disclosure Statement for a financial product states or implies that a financial product to which the Statement relates will be able to be traded on a financial market (whether in Australia or elsewhere) and:

(i) an application has not, within 7 days after the relevant date (see subsection (4)), been made to the operator of that market for the taking of such action as is necessary to enable financial products of that kind to be traded on that market; or

(ii) at the end of the period of 3 months starting on the relevant date, financial products of that kind are not able to be traded on that market; or

(c) in relation to a Product Disclosure Statement for a financial product, the responsible person becomes aware that the Product Disclosure Statement was defective as at the time when it was prepared, or that it became or has become defective as at some later time.

Note: Information and statements in a Supplementary Product Disclosure Statement are taken to be contained in the Product Disclosure Statement it supplements (see section 1014D).

(2) If this section applies, the responsible person must, in relation to any application for financial products of the relevant kind that is made in response to the Product Disclosure Statement (the first Product Disclosure Statement) and that has not resulted in an issue or sale of financial products of that kind, comply with one of the following paragraphs:

(a) the responsible person must repay the money they received from the applicant; or

(aa) the responsible person must give the applicant:

(i) a new Product Disclosure Statement for the financial products, and an additional statement that identifies the respects in which the new Product Disclosure Statement is materially different from the first Product Disclosure Statement; and

(ii) 1 month to withdraw their application and be repaid; or

(b) the responsible person must give the applicant:

(i) a Supplementary Product Disclosure Statement that changes the statement referred to in paragraph (1)(a) or (b), or that corrects the deficiency referred to in paragraph (1)(c); and

(ii) 1 month to withdraw their applications and be repaid; or

(ba) the responsible person must issue or sell the financial products to the applicant and give them:

(ii) 1 month to return the financial products and be repaid; or

(i) a Supplementary Product Disclosure Statement that changes the statement referred to in paragraph (1)(a) or (b), or that corrects the deficiency referred to in paragraph (1)(c); and

(ii) 1 month to return the financial products and be repaid.

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

Note 2: If the responsible person chooses the option given by paragraph (aa) or (b), that option does not require the responsible person to wait until the end of the month referred to in subparagraph (aa)(ii) or (b)(ii) before going ahead and issuing or selling the financial products to the applicant if the applicant indicates before then that they still wish to proceed with the application.

Note 3: However, if the responsible person chooses the option given by paragraph (aa) or (b), whether the responsible person may go ahead and issue or sell the financial products to the applicant at the end of the month referred to in subparagraph (aa)(ii) or (b)(ii) (or earlier, as mentioned in note 2) is affected by this subsection and sections 1016A to 1016E (including as those provisions are affected by subsections (2A) and (2B) of this section).

Note 4: If the responsible person chooses the option given by paragraph (c), sections 1016A to 1016D do not prohibit the issue or sale of the financial products under that paragraph (see subsection (2C) of this section).

(2A) If, in accordance with paragraph (2)(aa), the responsible person gives the applicant a new Product Disclosure Statement for the financial products and the additional statement referred to in subparagraph (2)(aa)(i):

(a) subsection (2), and sections 1016B, 1016C, 1016D and 1016E, apply in relation to the application, from the time when the applicant is given the new Product Disclosure Statement (the correction time), as if the application had been made in response to the new Product Disclosure Statement; and

(b) if:

(i) the reason for giving the new Product Disclosure Statement was that the responsible person became aware that the first Product Disclosure Statement was defective as at the time when it was prepared, or had become defective by the time the application was made; and

(ii) the financial products are relevant financial products as defined in section 1016A;

section 1016A applies in relation to the application, from the correction time, as if the first Product Disclosure Statement had instead contained the content of the new Product Disclosure Statement.

Note 1: Because of paragraph (a):

(a) if this section applies to the new Product Disclosure Statement, the responsible person’s ability to proceed to issue or sell the financial products pursuant to the application will be affected by subsection (2), and by sections 1016B, 1016C and 1016D, as those provisions apply in relation to the new Product Disclosure Statement (even though the application was actually made in response to the first Product Disclosure Statement); and

(b) sections 1016B, 1016C and 1016D, as they relate to the first Product Disclosure Statement, cease to apply in relation to the application.

Note 2: Because of paragraph (b), the application may be an eligible application as defined in section 1016A, even though the first Product Disclosure Statement was actually defective as at the time when the application was made.

(2B) If:

(a) in accordance with paragraph (2)(b), the responsible person gives the applicant a Supplementary Product Disclosure Statement that relates to the financial products; and

(b) the reason for giving the Supplementary Product Disclosure Statement was that the responsible person became aware that the first Product Disclosure Statement was defective as at the time when it was prepared, or had become defective by the time the application was made; and

section 1016A applies in relation to the application, from the time when the applicant is given the Supplementary Product Disclosure Statement, as if the Supplementary Product Disclosure Statement had been given to the applicant before the application was made.

Note 1: Because of this subsection and section 1014D (information in a Supplementary Product Disclosure Statement is taken to be contained in the Product Disclosure Statement it supplements), the application may be an eligible application as defined in section 1016A, even though the Supplementary Product Disclosure Statement was not actually given until after the time when the application was made.

Note 2: The responsible person’s ability to proceed to issue or sell the financial products pursuant to the application will be affected by subsection (2), and by sections 1016B, 1016C and 1016D, as those provisions apply in relation to the first Product Disclosure Statement as affected by the Supplementary Product Disclosure Statement and any other Supplementary Product Disclosure Statements.

(2BA) If Subdivision DA applies:

(a) for the purposes of subsection (2), instead of giving the applicant a Supplementary Product Disclosure Statement, the responsible person may give the applicant a Replacement Product Disclosure Statement; and

(b) if the responsible person gives the applicant a Replacement Product Disclosure Statement, subsection (2B) applies as if references in that subsection to a Supplementary Product Disclosure Statement were references to the Replacement Product Disclosure Statement.

(2C) If the responsible person chooses to comply with paragraph (2)(c), nothing in sections 1016A to 1016D applies to the issue or sale of the financial products under that paragraph.

Note: This subsection affects the elements of the offences under sections 1016A to 1016D, and so it is not an exception in relation to which a defendant bears an evidential burden under subsection 13.3(3) of the Criminal Code.

(3) For the purpose of working out whether the condition referred to in paragraph (1)(a) has been satisfied, a person who has agreed to take a financial product as an underwriter is taken to have applied for that financial product.

(4) For the purposes of paragraphs (1)(a) and (b), the relevant date in relation to an express or implied statement is:

(a) if the statement is express or implied in a Product Disclosure Statement, disregarding the effect of section 1014D—the date of the Product Disclosure Statement; or

(b) if the statement is express or implied in a Supplementary Product Disclosure Statement—the date of the Supplementary Product Disclosure Statement; or

(5) For the purposes of this section, defective, when used in relation to a Product Disclosure Statement at a particular time, means that the Product Disclosure Statement, if it had been given to a person at that time, would have been defective as defined in Subdivision A of Division 7.

Note: Information in a Supplementary Product Disclosure Statement is taken to be contained in the Product Disclosure Statement it supplements (see section 1014D).

1016F Remedies for person acquiring financial product under defective Product Disclosure Document

(1) Subject to this section, if a financial product is issued or sold to a person (the client) in contravention of section 1016E, the client has the right to return the product and to have the money they paid to acquire the product repaid. This is so even if the responsible person is being wound up.

(2) If the responsible person:

(a) is a body corporate; and

(b) does not repay the money as required by subsection (1);

the directors of the responsible person are personally liable to repay the money.

(3) The right to return the product must be exercised by notifying the responsible person in one of the following ways:

(a) in writing; or

(b) electronically; or

Also, if the regulations require the client to comply with other requirements in order to exercise the right to return the product, those other requirements must be complied with.

(4) The right to return the product can only be exercised during the period of 1 month starting on the date of the issue or sale of the product to the client.

(5) On the exercise of the right to return the product:

(a) if the product is constituted by a legal relationship between the client and the issuer of the product—that relationship is, by force of this section, terminated with effect from that time without penalty to the client; and

(b) any contract for the acquisition of the product by the client is, by force of this section, terminated with effect from that time without penalty to the client.

(6) The regulations may provide for consequences and obligations (in addition to those provided for by subsection (5)) to apply if the right to return a financial product is exercised.

(7) The regulations may do any or all of the following:

(a) provide that a specified subclass of financial products that would otherwise be covered by this section is excluded from this section;

(b) provide additional requirements to be satisfied before this section applies in relation to a class or subclass of financial products;

(c) provide that this section does not apply in relation to the provision of a financial product in specified circumstances.

Division 3—Other disclosure obligations of the issuer of a financial product

1017A Obligation to give additional information on request

Obligation to give information

(1) The following people may request the person who is the responsible person for a Product Disclosure Statement for a financial product under Division 2 to provide further information about the product:

(a) a person who:

(i) has been or should have been given, or who has obtained, the Product Disclosure Statement for the financial product; and

(ii) is not a holder of the financial product;

(b) a financial services licensee;

(e) a person who is not required to hold an Australian financial services licence because the person is covered by:

(i) paragraph 911A(2)(j); or

(ii) an exemption in regulations made for the purposes of paragraph 911A(2)(k); or

(iii) an exemption specified by ASIC for the purposes of paragraph 911A(2)(l).

(2) The responsible person must give the person the information if:

(a) the financial product is offered in this jurisdiction or the Product Disclosure Statement is given or obtained in this jurisdiction; and

(b) the responsible person has previously made the information generally available to the public; and

(c) the information might reasonably influence a person’s decision, as a retail client, whether to acquire a financial product to which the Statement relates; and

(d) it is reasonably practicable for the responsible person to give the person the information; and

(e) the person pays any charge payable under subsection (5).

The responsible person does not need to give information that is contained in the Product Disclosure Statement.

Note 1: Paragraph (b)—This requirement means that the responsible person does not have to disclose material that is confidential because it is:

(a) an internal working document; or

(b) personal information about another person; or

(c) a trade secret or other information that has a commercial value that would be reduced or destroyed by the disclosure; or

(d) material that the responsible person owes another a person a duty not to disclose.

Note 2: Information in a Supplementary Product Disclosure Statement is taken to be contained in the Product Disclosure Statement it supplements (see section 1014D).

(3) The responsible person must take reasonable steps to ensure that, as soon as practicable after receiving the request, and in any event within one month, subsection (2) is complied with.

Manner of giving information

(4) The responsible person may give the person making the request the information:

(a) by making a document containing the information available for inspection by the person:

(i) at a suitable place in this jurisdiction (having adequate facilities for the person to inspect and photocopy the document); and

(ii) during normal business hours; or

(b) in some other way that is agreed between the responsible person and the person making the request.

Issuer or seller may charge for giving information

(5) The responsible person may require the person making the request to pay a charge for obtaining the information.

(6) The amount of the charge must not exceed the reasonable costs that the responsible person incurs that are reasonably related to giving the information (including any costs incurred in photocopying the document containing the information).

Note: This would include the costs of searching for, obtaining and collating the information.

1017B Ongoing disclosure of material changes and significant events

Issuer to notify holders of changes and events

(1) If:

(a) a person (the holder) acquired a financial product as a retail client (whether or not it was acquired from the issuer); and

(b) either:

(i) the financial product was offered in this jurisdiction; or

(ii) the holder applied for the financial product in this jurisdiction; and

(d) the circumstances in which the product was acquired are not specified in regulations made for the purposes of this paragraph;

the issuer must, in accordance with subsections (3) to (8), notify the holder of changes and events referred to in subsection (1A).

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

The changes and events that must be notified

(1A) The changes and events that must be notified are:

(a) any material change to a matter, or significant event that affects a matter, being a matter that would have been required to be specified in a Product Disclosure Statement for the financial product prepared on the day before the change or event occurs; and

(b) any other change, event or other matter of a kind specified in regulations made for the purposes of this paragraph; and

(c) without limiting paragraph (a) or (b)—any replacement of a kind specified in regulations made for the purposes of this paragraph of a beneficial interest of a class that is a MySuper product with a beneficial interest of another class in a superannuation entity.

Note: Paragraph (a) applies whether or not a Product Disclosure Statement for the financial product was in fact prepared (or required to be prepared) on the day before the change or event occurs.

(2) The issuer does not need to give the notice if the financial product is a managed investment product or foreign passport fund product that is an ED security.

Note 1: The continuous disclosure provisions in Chapter 6CA (sections 674‑677) apply to managed investment products and foreign passport fund products that are ED securities.

Note 2: A defendant bears an evidential burden in relation to the matters in this subsection.

(3) The issuer must notify the holder in one of the following ways:

(a) in writing; or

(b) electronically; or

(4) The notice must give the holder the information that is reasonably necessary for the holder to understand the nature and effect of the change or event.

Time for notifying holders

(5) The time within which the issuer must give the notice is set out in the following table:

Time for giving notice of change or event
	Nature of change or event	Time for giving notice
1	Change or event is not an increase in fees or charges	Subject to subsection (6), before the change or event occurs or as soon as practicable after, but not more than 3 months after, the change or event occurs
2	Change is an increase in fees or charges	30 days before the change takes effect

(6) If the change or event is not an increase in fees or charges, the notice may be given more than 3 months after the change or event occurs if:

(a) the issuer reasonably believes that the event is not adverse to the holder’s interests and accordingly the holder would not be expected to be concerned about the delay in receiving the information; and

(b) the notice is given no later than 12 months after the change or event occurs.

(7) If the change or event might result in an increase in fees or charges, this section applies to the change or event as if it would result in an increase in fees or charges.

(8) In any proceedings against the issuer for an offence based on subsection (1), it is a defence if the issuer took reasonable steps to ensure that the other person would be notified of the matters required by subsection (1) in accordance with subsections (3) to (8).

Note: A defendant bears an evidential burden in relation to the matters in subsection (8). See subsection 13.3(3) of the Criminal Code.

(9) In this section:

fees or charges does not include fees or charges payable under a law of the Commonwealth or of a State or Territory.

MySuper product has the same meaning as in the Superannuation Industry (Supervision) Act 1993.

1017BA Trustees of regulated superannuation funds—obligation to make product dashboard publicly available

(1) The trustee, or the trustees, of a regulated superannuation fund that has 5 or more members must ensure:

(a) that a product dashboard for each of the fund’s MySuper products and choice products is publicly available at all times on the fund’s website; and

(b) that each product dashboard sets out the information required by subsection (2) or (3); and

(c) that the information set out in each product dashboard about fees and other costs is updated within 14 days after the end of a period prescribed by the regulations; and

(d) that the other information set out in each product dashboard is updated within 14 days after any change to the information; and

(e) if the regulations prescribe the way in which information is to be set out in a product dashboard—that each product dashboard sets out the information in accordance with the regulations.

(2) The product dashboard for a MySuper product must set out:

(a) the following, worked out in accordance with the regulations in relation to the period or periods prescribed by the regulations:

(i) a return target or return targets for the product;

(ii) a return or returns for the product;

(iii) a comparison or comparisons between return targets and returns for the product;

(iv) the level of investment risk that applies to the product;

(v) a statement of fees and other costs in relation to the product; and

(b) any other information prescribed by the regulations.

(3) Subject to subsection (4), the product dashboard for a choice product must set out:

(a) the following for each investment option offered within the choice product, worked out in accordance with the regulations in relation to the period or periods prescribed by the regulations:

(i) a return target or return targets for the investment option;

(ii) a return or returns for the investment option;

(iii) a comparison or comparisons between return targets and returns for the investment option;

(iv) the level of investment risk that applies to the investment option;

(v) a statement of fees and other costs in relation to the investment option; and

(b) any other information prescribed by the regulations.

(4) Subsection (3) does not apply to an investment option within a choice product if:

(a) the assets of the fund that are invested under the option are invested only in one or more of the following:

(i) a life policy under which contributions and accumulated earnings may not be reduced by negative investment returns or any reduction in the value of assets in which the policy is invested;

(ii) a life policy under which the benefit to a member (or a relative or dependant of a member) is based only on the realisation of a risk, not the performance of an investment;

(iii) an investment account contract the only beneficiaries of which are a member, and relatives and dependants of a member; or

(b) the sole purpose of the investment option is the payment of a pension to members who have satisfied a condition of release of benefits specified in a standard made under paragraph 31(2)(h) of the Superannuation Industry (Supervision) Act 1993; or

(4A) The regulations may prescribe circumstances in which assets of a regulated superannuation fund are, or are not, to be treated as invested in a single asset for the purposes of paragraph (4)(c).

(5) In this section:

choice product has the same meaning as in the Superannuation Industry (Supervision) Act 1993.

fee, in relation to a MySuper product or a choice product offered by a regulated superannuation fund, means a fee (other than an activity fee, an advice fee or an insurance fee within the meaning of the Superannuation Industry (Supervision) Act 1993) that may be charged by the trustee, or the trustees, of the regulated superannuation fund in relation to the product under that Act.

investment account contract has the same meaning as in the Life Insurance Act 1995.

life policy has the same meaning as in the Life Insurance Act 1995.

member, in relation to a regulated superannuation fund, has the same meaning as in the Superannuation Industry (Supervision) Act 1993.

MySuper product has the same meaning as in the Superannuation Industry (Supervision) Act 1993.

pension has the same meaning as in the Superannuation Industry (Supervision) Act 1993.

regulated superannuation fund has the same meaning as in the Superannuation Industry (Supervision) Act 1993.

1017BB Trustees of registrable superannuation entities—obligation to make information relating to investment of assets publicly available

(1) The trustee, or the trustees, of a registrable superannuation entity (other than a pooled superannuation trust) must make the following information publicly available on the entity’s website no later than 90 days after each reporting day:

(a) information that is sufficient to identify each of the financial products or other property in which assets, or assets derived from assets, of the entity are invested, at the end of the reporting day;

(b) the value of the assets, or assets derived from assets, of the entity, at the end of the reporting day, that are invested in each of the financial products or other property.

(2) Information made publicly available under subsection (1) in respect of a reporting day must continue to be made publicly available on the registrable superannuation entity’s website until information relating to the next reporting day is made publicly available under subsection (1).

(3) If the regulations prescribe the way in which information made publicly available under subsection (1) must be organised, the information must be organised in accordance with the regulations.

(4) The regulations may provide that investment in a financial product or other property is not a material investment in circumstances prescribed by the regulations.

(5) If regulations are made for the purposes of subsection (4), information relating to the investment of a financial product or other property in the prescribed circumstances is not required to be made publicly available under subsection (1).

(6) In this section:

reporting day means 30 June and 31 December each year.

1017BC Obligations relating to investment of assets of registrable superannuation entities—general rule about giving notice and providing information

(1) This section applies if:

(a) a person (the first party) enters into an arrangement with another person (the second party); and

(b) under the terms of the arrangement, the first party acquires a financial product from the second party; and

(d) the first party knows, or reasonably ought to know, that an asset that is the subject of the arrangement is, or is derived from, an asset of a registrable superannuation entity; and

(e) the arrangement is not of a kind prescribed by the regulations as an arrangement to which this section does not apply.

Obligation of first party

(2) The first party must, at the time the arrangement is entered into, notify the second party of the following:

(a) that an asset that is the subject of the arrangement is, or is derived from, the assets of a registrable superannuation entity;

(b) details of the trustee, or the trustees, of the registrable superannuation entity.

Obligations of second party

(3) If the second party is notified by the first party in accordance with subsection (2), the second party must provide the trustee, or the trustees, of the registrable superannuation entity with information about:

(a) the financial product acquired by the first party; and

(b) if the second party knows, or reasonably ought to know, that:

(i) an asset about which the second party was notified by the first party will be used, by the second party or another person, to acquire another financial product—that financial product; or

(ii) an asset about which the second party was notified by the first party will be used, by the second party or another person, to acquire property other than a financial product—that other property;

sufficient to allow the trustee, or the trustees, of the registrable superannuation entity to satisfy the obligation under section 1017BB.

Obligation of agent of first party

(4) If the financial product is acquired in this jurisdiction on behalf of the first person by a person (the agent) other than a person who is the provider or acquirer under a custodial arrangement:

(a) the agent must notify the second party in accordance with subsection (2) on behalf of the first party; and

(b) if the agent so notifies the second party, the first party is taken to have satisfied the obligation under that subsection.

Definitions

(5) In this section:

acquirer, in relation to a custodial arrangement, has the same meaning as in subsection 1012IA(1).

custodial arrangement has the same meaning as in subsection 1012IA(1).

provider, in relation to a custodial arrangement, has the same meaning as in subsection 1012IA(1).

1017BD Obligations relating to investment of assets of registrable superannuation entities—giving notice to providers under custodial arrangements

(1) This section applies if:

(a) a person (the first party) enters into an arrangement (the core arrangement) with another person (the second party); and

(b) under the terms of the core arrangement, the second party is the provider under a custodial arrangement under which the first party is a client; and

(c) the first party knows, or reasonably ought to know that, under the custodial arrangement, a financial product may be acquired in this jurisdiction; and

(d) the first party knows, or reasonably ought to know, that an asset that is the subject of the core arrangement is, or is derived from, an asset of a registrable superannuation entity; and

(e) the core arrangement is not of a kind prescribed by the regulations as an arrangement to which this section does not apply.

(2) The first party must, at the time the core arrangement is entered into, notify the second party of the following:

(a) that an asset that is the subject of the core arrangement is, or is derived from, the assets of a registrable superannuation entity;

(b) details of the trustee, or the trustees, of the registrable superannuation entity.

Note: Section 1017BC may apply in relation to an arrangement under which the second party, or an acquirer under the custodial arrangement, actually acquires the financial product.

(3) In this section:

acquirer, in relation to a custodial arrangement, has the same meaning as in subsection 1012IA(1).

client, in relation to a custodial arrangement, has the same meaning as in subsection 1012IA(1).

custodial arrangement has the same meaning as in subsection 1012IA(1).

provider, in relation to a custodial arrangement, has the same meaning as in subsection 1012IA(1).

1017BE Obligations relating to investment of assets of registrable superannuation entities—giving notice to acquirers under custodial arrangements

(1) This section applies if:

(a) a person (the first party) enters into an arrangement (the core arrangement) with another person (the second party); and

(b) under the terms of the core arrangement, the second party is the acquirer in relation to a custodial arrangement under which the first party is the provider; and

(c) the first party knows, or reasonably ought to know that, under the core arrangement, the second party may acquire a financial product in this jurisdiction; and

(d) the first party knows, or reasonably ought to know, that an asset that is the subject of the core arrangement is, or is derived from, an asset of a registrable superannuation entity; and

(e) the core arrangement is not of a kind prescribed by the regulations as an arrangement to which this section does not apply.

(2) The first party must, at the time the core arrangement is entered into, notify the second party of the following:

(a) that an asset that is the subject of the core arrangement is, or is derived from, the assets of a registrable superannuation entity;

(b) details of the trustee, or the trustees, of the registrable superannuation entity.

Note: Section 1017BC may apply in relation to an arrangement under which the second party actually acquires the financial product.

(3) In this section:

acquirer, in relation to a custodial arrangement, has the same meaning as in subsection 1012IA(1).

custodial arrangement has the same meaning as in subsection 1012IA(1).

provider, in relation to a custodial arrangement, has the same meaning as in subsection 1012IA(1).

1017C Information for existing holders of superannuation products and RSA products

Application

(1) This section applies to the issuer of a financial product if the product is:

(a) a superannuation product; or

(b) an RSA product.

Information for concerned person related to a superannuation product

(2) If the financial product is a superannuation product, then, subject to subsection (4), the issuer must, on request by a concerned person, give the concerned person information that the concerned person reasonably requires for the purposes of:

(a) understanding any benefit entitlements that the concerned person may have, has or used to have under the superannuation product; or

(b) understanding the main features of:

(i) the relevant sub‑plan; or

(ii) if there is no relevant sub‑plan—the superannuation entity; or

(i) the superannuation entity; and

(ii) the relevant sub‑plan (if any); or

(d) making an informed judgment about the investment performance of:

(i) the relevant sub‑plan; or

(ii) if there is no relevant sub‑plan—the superannuation entity; or

(e) understanding the particular investments of:

(i) the superannuation entity; and

(ii) the relevant sub‑plan (if any).

The information must be given in accordance with the other requirements of this section.

Note 1: Subsection (9) defines concerned person and relevant sub‑plan.

Note 2: Failure to comply with this subsection is an offence (see subsection 1311(1)).

Information for concerned person related to an RSA product

(2A) If the financial product is an RSA product, then, subject to subsection (4), the issuer must, on request by a concerned person, give the concerned person information that the concerned person reasonably requires for the purposes of:

(a) understanding any benefit entitlements that the concerned person may have, has or used to have under the RSA product; or

(b) understanding the main features of the RSA product.

The information must be given in accordance with the other requirements of this section.

Note 1: Subsection (9) defines concerned person.

Note 2: Failure to comply with this subsection is an offence (see subsection 1311(1)).

Information for employer‑sponsor related to a superannuation product

(3) If the financial product is a superannuation product, then, subject to subsection (4), the issuer must, on request by an employer‑sponsor, give the employer‑sponsor information that the employer‑sponsor reasonably requires for the purposes of:

(a) understanding the kinds of benefits to which the employer‑sponsor’s employees are entitled or will or may become entitled; or

(b) understanding the main features of:

(i) the relevant sub‑plan; or

(ii) if there is no relevant sub‑plan—the superannuation entity; or

(i) the superannuation entity; and

(ii) the relevant sub‑plan (if any); or

(d) making an informed judgment about the investment performance of:

(i) the relevant sub‑plan; or

(ii) if there is no relevant sub‑plan—the superannuation entity; or

(e) a matter related to the Superannuation Guarantee (Administration) Act 1992.

The information must be given in accordance with the other requirements of this section.

Note 1: Subsection (9) defines relevant sub‑plan.

Note 2: Failure to comply with this subsection is an offence (see subsection 1311(1)).

Information for employer related to an RSA product

(3A) If the financial product is an RSA product, then, subject to subsection (4), the issuer must, on request by an employer who made an application to acquire the RSA product on behalf of an employee, give the employer information that the employer reasonably requires for the purposes of:

(a) understanding the kinds of benefits to which the employer’s employees are entitled or will or may become entitled; or

(b) understanding the main features of the RSA product; or

The information must be given in accordance with the other requirements of this section.

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

Exceptions

(4) This section does not require (and does not, by implication, authorise) the disclosure of:

(a) internal working documents of the issuer; or

(b) information or documents that would disclose, or tend to disclose:

(i) personal information of another person if, in the circumstances, the disclosure would be unreasonable; or

(ii) trade secrets or other information having a commercial value that would be reduced or destroyed by the disclosure; or

Note: A defendant bears an evidential burden in relation to the matters in this subsection. See subsection 13.3(3) of the Criminal Code.

Specific requirements

(5) The issuer must, on request in writing by a person who is a concerned person, an employer‑sponsor (if the financial product is a superannuation product) or an employer referred to in subsection (3A) (if the financial product is an RSA product), give the person:

(a) a copy of a prescribed document (to the extent the issuer has access to the document) specified in the request; or

(b) prescribed information (to the extent to which the issuer has or has access to the information) specified in the request.

The document or information must be given in accordance with the other requirements of this section.

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

(6) Subsection (5) does not apply if the issuer is the trustee of a self‑managed superannuation fund.

Documents may be made available for inspection

(7) It is sufficient compliance with a requirement imposed by this section on the issuer to give information, or to give a copy of a document, to a person (the client) if:

(a) a document containing the information; or

(b) a copy of the document;

is made available for inspection by the issuer:

(d) during normal business hours;

or as otherwise agreed between the issuer for the financial product and the client.

Time for compliance

(8) The issuer must comply with a request to give information, or a copy of a document, as soon as practicable. The issuer must, in any event, make reasonable efforts to comply with the request within 1 month of receiving the request.

Definitions

(9) In this section:

concerned person:

(a) in relation to a superannuation product—means a person who:

(i) is, or was within the preceding 12 months, a member of the superannuation entity; or

(ii) is a beneficiary of the superannuation entity; or

(b) in relation to an RSA product—means a person who:

(i) is, or was within the preceding 12 months, a holder of the RSA product; or

(ii) has a right or a claim under the RSA product.

relevant sub‑plan, in relation to a superannuation product, has the meaning given by the regulations.

1017D Periodic statements for retail clients for financial products that have an investment component

(1) If:

(a) a person (the holder) of a financial product acquired the financial product as a retail client (whether or not it was acquired from the issuer); and

(b) the product is:

(i) a managed investment product; or

(ia) a foreign passport fund product; or

(ii) a superannuation product; or

(iii) an RSA product; or

(iv) an investment life insurance product; or

(v) a deposit product; or

(va) a margin lending facility; or

(vi) specified in regulations made for the purposes of this paragraph; and

(i) the financial product was offered in this jurisdiction; or

(ii) the holder applied for the financial product in this jurisdiction;

the issuer of the product must, in accordance with subsections (2) to (6), give the holder a periodic statement for each reporting period during which the holder holds the product.

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

(2) The following provisions apply in relation to reporting periods:

(a) each reporting period lasts for a period, not exceeding 1 year, determined by the issuer;

(b) the first reporting period starts when the holder acquired the product;

(d) if the holder ceases to hold the product, the period starting at the end of the preceding reporting period and ending when the holder ceases to hold the product is a reporting period.

(3) The periodic statement must be given as soon as practicable after, and in any event within 6 months after, the end of the reporting period to which it relates.

(4) The periodic statement must give the holder the information that the issuer reasonably believes the holder needs to understand his or her investment in the financial product.

(5) The periodic statement must include the following if they are relevant to the financial product:

(a) opening and closing balances for the reporting period;

(b) the termination value of the investment at the end of the reporting period (to the extent to which it is reasonably practicable to calculate that value for the investment or a component of the investment);

(c) details of transactions in relation to the product during the reporting period as required by regulations made for the purposes of this paragraph;

(d) any increases in contributions in relation to the financial product by the holder or another person during the reporting period;

(e) return on investment during the reporting period (on an individual basis if reasonably practicable to do so and otherwise on a fund basis);

(f) details of any change in circumstances affecting the investment that has not been notified since the previous periodic statement;

(g) details prescribed by regulations made for the purposes of this paragraph.

(5A) Unless in accordance with the regulations:

(a) for information to be disclosed in accordance with paragraphs (5)(a), (b), (c), (d) and (e), any amounts are to be stated in dollars; and

(b) for any other information in relation to amounts paid by the holder of the financial product during the period, any amounts are to be stated in dollars.

(6) The periodic statement must be given in one of the following ways:

(a) in writing; or

(b) electronically; or

(7) The periodic statement need not be given if the issuer has already given the holder all the information that would be included in the periodic statement if it were to be given.

Note: A defendant bears an evidential burden in relation to the matters in this subsection.

1017DA Trustees of superannuation entities—regulations may specify additional obligations to provide information

(1) The regulations may:

(a) require the trustee of a superannuation entity to do all or any of the following:

(i) provide information to the holder of a superannuation product (being an interest in that entity) with information relating to the management, financial condition and investment performance of the entity and/or of any relevant sub‑plan (within the meaning of section 1017C);

(ii) provide information to the holder or former holder of a superannuation product (being an interest in that entity), or to any other person to whom benefits under the product are payable, with information relating to his or her benefit entitlements;

(iii) provide information to the holder of a superannuation product (being an interest in the entity) with information about arrangements for dealing with inquiries and/or complaints relating to the product; or

(b) require an RSA provider to do either or both of the following:

(i) provide information to the holder or former holder of an RSA product provided by the RSA provider, or to any other person to whom benefits under the product are payable, with information relating to his or her benefit entitlements;

(ii) provide information to the holder of an RSA product provided by the RSA provider with information about arrangements for dealing with inquiries and/or complaints relating to the product.

(2) Without limiting subsection (1), regulations made for the purposes of that subsection may deal with all or any of the following:

(a) what information is to be provided;

(b) when information is to be provided;

(3) The trustee of a superannuation entity, or an RSA provider, must provide information in accordance with any applicable requirements of regulations made for the purposes of subsection (1).

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

(4) In this section:

RSA provider has the same meaning as in the Retirement Savings Accounts Act 1997.

superannuation entity has the same meaning as in the Superannuation Industry (Supervision) Act 1993.

1017E Dealing with money received for financial product before the product is issued

(1) This section applies to money paid to:

(a) an issuer (the product provider) of financial products; or

(b) a seller (the product provider) of financial products in relation to which the seller has prepared a Product Disclosure Statement;

if:

(c) the money is paid to acquire, or acquire an increased interest in, one or more of those financial products from the product provider (whether or not the acquisition would be by a person as a retail client); and

(d) the product provider does not, for whatever reason, issue or transfer the product or products, or the increased interest, immediately after receiving the money; and

(e) either:

(i) the financial product or increased interest was offered in this jurisdiction; or

(ii) the application for the financial product or increased interest was made in this jurisdiction; or

(iii) the money was received in this jurisdiction.

(1A) However, this section does not apply in relation to money paid to an issuer (the product provider) of foreign passport fund products if the money is paid to acquire, or acquire an increased interest in, one or more of those foreign passport fund products from the product provider (whether or not the acquisition would be by a person as a retail client).

(2) The product provider must ensure that the money is paid into an account that satisfies these requirements:

(a) the account is:

(i) with an Australian ADI; or

(ii) of a kind prescribed by regulations made for the purposes of this paragraph;

and is designated as an account for the purposes of this section of this Act; and

(b) the only money paid into the account is:

(i) money to which this section applies; or

(ii) interest on the amount from time to time standing to the credit of the account; and

(c) if regulations made for the purposes of this paragraph impose additional requirements—the requirements so imposed by the regulations.

The money must be paid into the account on the day it is received by the product provider, or on the next business day.

Note: See section 1021O for related offences.

(2A) Subject to subsection (2C), the money is taken to be held in trust by the product provider for the benefit of the person who paid the money.

(2C) The regulations may:

(a) provide that subsection (2A) does not apply in relation to money in specified circumstances; and

(b) provide for matters relating to the taking of money to be held in trust (including, for example, terms on which the money is taken to be held in trust and circumstances in which it is no longer taken to be held in trust).

(3) The money must only be taken out of the account if:

(a) it is taken out for the purpose of return to the person by whom it was paid; or

(b) the product is issued or transferred to, or in accordance with the instructions of, that person; or

(d) it is taken out in a situation specified by regulations made for the purposes of this paragraph.

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

(4) The product provider must:

(a) return the money; or

(b) issue or transfer the product to, or in accordance with the instructions of, the person who paid the money; or

(i) for a purpose specified by regulations made for the purposes of paragraph (3)(c); or

(ii) in a situation specified by regulations made for the purposes of paragraph (3)(d);

do any action required, by regulations made for the purposes of this paragraph, after taking out that money;

either:

(d) before the end of one month starting on the day on which the money was received; or

(e) if it is not reasonably practicable to do so before the end of that month—by the end of such longer period as is reasonable in the circumstances.

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

(5) The product provider may, for the purposes of this section, maintain a single account or 2 or more accounts.

(6) Nothing in this section, or in regulations made for the purposes of this section, makes the body (not being the product provider) that the account is with under paragraph (2)(a) subject to any liability merely because of a failure by the product provider to comply with any of the provisions of this section or those regulations.

1017F Confirming transactions

Transactions to which this section applies

(1) This section applies in relation to a transaction involving a financial product if:

(a) a person (the holder) acquired the product as a retail client; and

(b) the transaction is:

(i) the transaction by which the holder acquired the product; or

(ii) a transaction that occurs while the holder holds the product, including a transaction by which the holder disposes of all or part of the product (and see also subsection (3)); and

(d) the holder has not, in accordance with regulations made for the purposes of paragraph (9)(d), waived their right to be provided with confirmation of the transaction; and

(e) either:

(i) the financial product was offered to, or acquired by, the holder in this jurisdiction; or

(ii) the transaction takes place in this jurisdiction.

Note: This section extends to financial products that are securities (see section 1010A).

Obligation to confirm transactions

(2) The person (the responsible person) specified in column 3 of an item in the following table must provide the holder with confirmation of the transaction specified in column 2 of the same item. The confirmation must be provided in accordance with subsections (5) to (8).

Who bears the obligation to confirm a transaction
Item	Transaction	Whose obligation?
1	transaction by which the holder acquired the financial product, unless that transaction was a sale pursuant to an offer to which section 1012C applies	the issuer of the product
2	transaction by which the holder acquired the financial product, where that transaction was a sale pursuant to an offer to which section 1012C applies	the seller of the product
3	any other transaction in relation to the financial product that occurs while the holder holds the product, other than a disposal of all or part of the product	the issuer of the product
4	transaction by which the holder disposes of all or part of the financial product	the person specified in the regulations made for the purposes of this item

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

Examples of transactions that are covered by subparagraph (1)(b)(ii)

(3) Without limiting the generality of subparagraph (1)(b)(ii), the transactions that are covered by that subparagraph include:

(a) varying the terms of the financial product while the holder holds the product (unless subsection (4) provides that the variation does not require confirmation); and

(b) the redemption or surrender of the financial product from or by the holder.

Transactions that do not require confirmation

(4) The following transactions do not require confirmation:

(a) a transaction consisting solely of an additional contribution towards the financial product in either of the following circumstances:

(i) the timing and amount, or method of calculating the amount, of the additional contribution was agreed on when the product was acquired by the holder;

(ii) the additional contribution is an amount that is payable under the terms of the product because of an increase in an external factor, such as a person’s salary, an inflation index or a rate of a tax or levy;

(b) if the financial product is a security—a transaction consisting solely of a variation of the rights attaching to the security;

(i) a withdrawal from the deposit product pursuant to a cheque drawn on the account;

(ii) a deposit to, or withdrawal from, the deposit product under a direct credit arrangement or a direct debit arrangement;

(iii) crediting interest to the deposit product;

(iv) debiting the deposit product for fees or charges in respect of the product or transactions involving the product;

(v) debiting the deposit product for charges or duties on deposits into, or withdrawals from, the product that are payable under a law of the Commonwealth or of a State or Territory;

(vi) a transaction of a kind specified in regulations made for the purposes of this subparagraph;

(d) a variation of the terms of all financial products in the class to which the financial product belongs;

(e) a transaction of a kind specified in regulations made for the purposes of this paragraph.

Note 1: Because of subparagraph (a)(i), confirmation is not required, e.g., for regular monthly contributions to a superannuation fund.

Note 2: A defendant bears an evidential burden in relation to the matters in this subsection.

Confirmation may be provided on a transaction‑by‑transaction basis or by means of a standing facility

(5) Confirmation of a transaction must be provided:

(a) by confirming the transaction in accordance with subsections (6) to (8), to the holder as soon as is reasonably practicable after the transaction occurs; or

(b) subject to subsection (5A), by providing the holder with access to a facility through which they can, for themselves, get a confirmation of the transaction in accordance with subsections (6) to (8) as soon as is reasonably practicable after the transaction occurs.

An arrangement under which the holder may request or require another person to provide a confirmation does not count as a facility that satisfies paragraph (b).

When confirmation may be provided by means of a standing facility

(5A) Confirmation may only be provided by means of a facility as mentioned in paragraph (5)(b) if:

(a) the holder concerned has agreed that confirmation of transactions involving the product may be provided by means of the facility; or

(b) the holder concerned:

(i) has, in accordance with the applicable requirements (if any) in regulations made for the purposes of this subparagraph, been informed, by or on behalf of the responsible person, about the facility and its availability to the holder as a means of obtaining confirmation of transactions involving the product; and

(ii) has not advised the responsible person that the holder does not agree to use the facility as a means of obtaining such confirmations.

Means of confirmation

(6) The confirmation of the transaction:

(a) must be:

(i) in writing; or

(ii) electronic; or

(iii) in some other form applicable under regulations made for the purposes of this paragraph; and

(b) may be provided:

(i) in a case to which paragraph (5)(a) applies—directly by the responsible person or through another person (such as a financial services licensee); or

(ii) in a case to which paragraph (5)(b) applies—through a facility provided directly by the responsible person, or provided on behalf of the responsible person by someone else.

Content of confirmation

(7) The confirmation of the transaction must give the holder the information that the responsible person reasonably believes the holder needs (having regard to the information the holder has received before the transaction) to understand the nature of the transaction.

(8) Without limiting subsection (7), the confirmation of the transaction must:

(a) identify the issuer and the holder; and

(b) if required to be given by a person other than the issuer—identify that person; and

(i) the date of the transaction; and

(ii) a description of the transaction; and

(iii) subject to regulations made for the purposes of this subparagraph—any amount paid or payable by the holder in relation to the transaction; and

(iv) subject to any regulations made for the purposes of this subparagraph—any taxes and stamp duties payable in relation to the transaction; and

(d) give any other details prescribed by regulations made for the purposes of this paragraph.

Regulations may provide for modification or waiver of confirmation obligation

(9) The regulations may do all or any of the following:

(a) modify subsection (2) to change the person required to provide confirmation of a transaction;

(b) modify subsections (5) and (6) to expand on or change the way in which confirmation of a transaction must be provided in particular circumstances;

(c) modify subsections (7) and (8) to expand on or change the information that must be included in the confirmation of a transaction in particular circumstances;

(d) specify the circumstances in which a person may waive the right to be provided with confirmation of a transaction, and specify how such a waiver may be made.

1017G Certain product issuers and regulated persons must meet appropriate dispute resolution requirements

(1) If:

(a) particular financial products are, or have been, available for acquisition (whether by issue or sale) by a person or persons as retail clients; and

(b) the issue or sale of those products is not covered by an Australian financial services licence;

both the issuer, and any regulated person obliged under subsection 1012C(5), (6) or (8) to give a retail client a Product Disclosure Statement for one or more of those financial products, must each:

(d) give to ASIC the same information as the issuer or regulated person would be required to give under subparagraph 912A(1)(g)(ii) of that Act if the issuer or regulated person were a financial services licensee.

Note 1: If the issue of particular financial products is covered by an Australian financial services licence, the requirement to have a dispute resolution system relating to the issue of the products is imposed by paragraph 912A(1)(g).

Note 2: Failure to comply with this subsection is an offence (see subsection 1311(1)).

(2) To comply with this subsection, a dispute resolution system must consist of:

(a) an internal dispute resolution procedure that:

(i) complies with standards, and requirements, made or approved by ASIC in accordance with regulations made for the purposes of this subparagraph; and

(ii) covers complaints, against the person required to have the system, made by retail clients in relation to financial services provided in relation to any of those products or, if any of those products are foreign passport fund products, the operation of the relevant notified foreign passport fund; and

(3) Regulations made for the purposes of subparagraph (2)(a)(i) may also deal with the variation or revocation of:

(a) standards or requirements made by ASIC; or

(b) approvals given by ASIC.

Division 4—Advertising for financial products

1018A Advertising or other promotional material for financial product must refer to Product Disclosure Statement

Advertisements and promotional material must identify issuer (or issuer and seller) and refer to Product Disclosure Statement

(1) Subject to this section, if a particular financial product is available for acquisition by persons as retail clients (whether or not it is also available for acquisition by persons as wholesale clients) by way of issue, or pursuant to sale offers to which section 1012C applies or will apply, a person must only:

(a) advertise the product; or

(b) publish a statement that is reasonably likely to induce people to acquire the product;

if the advertisement or statement:

(i) if the product is available by way of issue—the issuer of the product; or

(ii) if the product is available pursuant to sale offers to which section 1012C applies or will apply—the issuer of the product and the seller of the product; and

(d) indicates that a Product Disclosure Statement for the product is available and where it can be obtained; and

(e) indicates that a person should consider the Product Disclosure Statement in deciding whether to acquire, or to continue to hold, the product.

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

(2) Subject to this section, if a particular financial product, or proposed financial product, is not available for acquisition by persons as retail clients but it is reasonably likely that the product will become so available (whether or not it is, or will also become, available for acquisition by persons as wholesale clients) by way of issue, or pursuant to sale offers to which section 1012C will apply, a person must only:

(a) advertise the product; or

(b) publish a statement that is reasonably likely to induce people to acquire the product;

if the advertisement or statement:

(i) if the product is likely to be so available by way of issue—the issuer of the product; or

(ii) if the product is likely to be so available pursuant to sale offers to which section 1012C will apply—the issuer of the product and the seller of the product; and

(d) indicates that a Product Disclosure Statement for the product will be made available when the product is released or otherwise becomes available; and

(e) indicates when and where the Product Disclosure Statement is expected to be made available; and

(f) indicates that a person should consider the Product Disclosure Statement in deciding whether to acquire, or continue to hold, the product.

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

Note 2: Subsection (2) has an extended operation in relation to recognised offers under Chapter 8 (see subsection 1200L(4)).

Distribution of disclosure document

(3) A person may distribute a Product Disclosure Statement without contravening subsection (1) or (2). This does not apply if an order under section 1020E is in force in relation to the product.

Note 1: A defendant bears an evidential burden in relation to the matters in this section. See subsection 13.3(3) of the Criminal Code.

Note 2: Subsection (3) has an extended operation in relation to recognised offers under Chapter 8 (see subsection 1200L(5)).

General exceptions

(4) An advertisement or publication does not contravene subsection (1) or (2) if it:

(a) relates to a financial product that is able to be traded on a financial market and consists of a notice or report by the issuer of the product, or one of its officers, about its affairs to the market operator; or

(b) consists solely of a notice or report of a general meeting of the issuer; or

(i) does not contain information that materially affects affairs of the issuer, other than information previously made available in a Product Disclosure Statement that has been distributed, a disclosure document that has been lodged with ASIC, a CSF offer document that has been published on a platform of a CSF intermediary, an annual report or a notice or report referred to in paragraph (a) or (b); and

(ii) does not refer (whether directly or indirectly) to the offer of the financial product; or

(d) is a news report, or is genuine comment, in the media relating to:

(i) a Product Disclosure Statement that has been distributed, a disclosure document that has been lodged with ASIC or a CSF offer document that has been published on a platform of a CSF intermediary; or

(ii) information contained in such a Statement or document; or

(iii) a notice or report covered by paragraph (a), (b) or (c); or

(e) is a report about the financial products of the issuer published by someone who is not:

(i) the issuer; or

(ii) acting at the instigation of, or by arrangement with, the issuer; or

(iii) a director of the issuer; or

(iv) a person who has an interest in the success of the issue or sale of the financial product.

Paragraphs (d) and (e) do not apply if anyone gives consideration or another benefit for publishing the report.

Note: A defendant bears an evidential burden in relation to the matters in this section. See subsection 13.3(3) of the Criminal Code.

Liability of publishers

(5) A person does not contravene subsection (1) or (2) by publishing an advertisement or statement if the person:

(a) publishes it in the ordinary course of a media business; and

(b) did not know, and had no reason to suspect, that its publication would amount to a contravention of a provision of this section.

Note: A defendant bears an evidential burden in relation to the matters in this section. See subsection 13.3(3) of the Criminal Code.

Meaning of media

(6) For the purposes of this section, the media consists of:

(a) newspapers and magazines; and

(b) radio and television broadcasting services; and

(i) are operated on a commercial basis; and

(ii) are similar to newspapers, magazines or radio or television broadcasts.

1018B Prohibition on advertising personal offers covered by section 1012E

(1) A person must not advertise an offer, or intended offer, of financial products that would not need a Product Disclosure Statement because of section 1012E.

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

(2) A person does not contravene subsection (1) by publishing an advertisement or statement if the person:

(a) publishes it in the ordinary course of a media business; and

(b) did not know, and had no reason to suspect, that a Product Disclosure Statement was needed.

For this purpose, media has the same meaning as it has in section 1018A.

Note: A defendant bears an evidential burden in relation to the matters in this section. See subsection 13.3(3) of the Criminal Code.

Division 5—Cooling‑off periods

1019A Situations in which this Division applies

(1) Subject to subsection (2), this Division applies if:

(a) a financial product of one of the following classes is provided in this jurisdiction to a person as a retail client after the commencement of this Chapter:

(i) risk insurance products;

(ii) investment life insurance products;

(iii) managed investment products;

(iiia) foreign passport fund products;

(iv) superannuation products;

(v) RSA products; and

(b) the product is provided to the person:

(i) by way of issue; or

(ii) by way of sale pursuant to an offer to which section 1012C applies.

(2) The regulations may do any or all of the following:

(a) provide that a specified subclass of financial products that would otherwise be covered by a subparagraph of paragraph (1)(a) are excluded from that subparagraph;

(b) provide additional requirements to be satisfied before this Division applies in relation to a class or subclass of financial products;

(c) provide that this Division does not apply in relation to the provision of a financial product in specified circumstances.

(3) In this Division:

(a) the person referred to in paragraph (1)(a) is the client; and

(b) the person who issues or sells the product to the client is the responsible person.

1019B Cooling‑off period for return of financial product

(1) Subject to this section, the client has the right to return the financial product to the responsible person and to have the money they paid to acquire the product repaid. This is so even if the responsible person is being wound up.

(2) The right to return the product must be exercised by notifying the responsible person in one of the following ways:

(a) in writing; or

(b) electronically; or

Also, if the regulations require the client to comply with other requirements in order to exercise the right to return the product, those other requirements must be complied with.

(3) The right to return the product can only be exercised during the period of 14 days starting on the earlier of:

(a) the time when the confirmation requirement (if applicable) is complied with; or

(b) the end of the 5th day after the day on which the product was issued or sold to the client.

(4) For the purposes of subsection (3), the confirmation requirement is complied with when:

(a) the client receives confirmation, as mentioned in paragraph 1017F(5)(a), of the transaction by which they acquired the product; or

(b) confirmation of that transaction is available to the client by a facility as mentioned in paragraph 1017F(5)(b).

(5) The right to return the product (and have money paid to acquire it repaid) cannot be exercised at any time after:

(a) the client has (whether before or after the start of the period referred to in subsection (3)) exercised a right or power that they have under the terms applicable to the product; or

(b) the time (whether before or after the start of the period referred to in subsection (3)) at which, under the terms applicable to the product, the client’s rights or powers in respect of the product end.

Note: So, e.g.:

(a) if the product is a contract of insurance, the right to return cannot be exercised after the client has made a claim under the contract of insurance; and

(b) if the product is a contract of insurance covering a period of only one week, the right to return cannot be exercised after the end of that week.

(5A) The regulations may specify other circumstances in which the right to return the product (and have money paid to acquire it repaid) cannot be exercised.

(6) On the exercise of the right to return the product:

(b) any contract for the acquisition of the product by the client is, by force of this section, terminated with effect from that time without penalty to the client.

(7) The regulations may provide for consequences and obligations (in addition to those provided for by subsection (6)) to apply if the right to return a financial product is exercised.

(8) The regulations may provide that, in specified circumstances, the amount to be repaid on exercise of the right to return a financial product is to be increased or reduced in accordance with the regulations.

Division 5A—Unsolicited offers to purchase financial products off‑market

1019C Definitions

In this Division:

date of offer has the meaning given by subsection 1019I(1).

offeree, in relation to an offer to which this Division applies, has the meaning given by subsection 1019D(1).

offeror, in relation to an offer to which this Division applies, has the meaning given by subsection 1019D(1).

offer to which this Division applies means an offer to which this Division applies because of section 1019D.

1019D Offers to which this Division applies

(1) This Division applies to an offer in relation to which the following paragraphs are satisfied:

(a) the offer is an unsolicited offer to purchase a financial product made by a person (the offeror) to another person (the offeree);

(b) the offer is made otherwise than on a licensed market;

(i) the offer is made in the course of a business of purchasing financial products;

(ii) the offeror was not in a personal or business relationship with the offeree before the making of the offer;

(iii) the offer is made in circumstances specified in regulations made for the purposes of this subparagraph;

(d) the offer is not:

(i) made to the issuer of the financial products; or

(ii) to buy back shares under a buy‑back authorised by section 257A; or

(iii) made under a compromise or arrangement approved at a meeting held as a result of an order under subsection 411(1) or (1A); or

(iv) to acquire securities under an off‑market bid; or

(v) to compulsorily acquire or buy out securities under Chapter 6A; or

(vi) to acquire shares from a dissenting shareholder under section 414; or

(vii) made in relation to particular financial products that are specified in regulations made for the purposes of this subparagraph; or

(viii) made in circumstances that are specified in regulations made for the purposes of this subparagraph;

(e) the offer is made or received in this jurisdiction.

(2) The regulations may clarify:

(a) when an offer is, or is not, made in the course of a business of purchasing financial products; or

(b) when an offeror was, or was not, in a previous personal or business relationship with an offeree.

Regulations made for the purposes of this subsection have effect despite anything else in this section.

1019E How offers are to be made

(1) An offer to which this Division applies must not be made otherwise than by sending an offer document in printed or electronic form to the offeree in accordance with the following requirements:

(a) the document must be sent to an address of the offeree (which may be an electronic address);

(b) either the envelope or the container in which it is sent, or the message that accompanies it, must be addressed to the offeree.

(2) The offer document must be sent to the offeree as soon as practicable after the date of offer.

1019F Prohibition on inviting offers to sell

A person must not invite another person to make an offer to sell a financial product in circumstances in which, if the invitation were instead an offer to purchase the financial product, that offer would be an offer to which this Division applies.

1019G Duration and withdrawal of offers

(1) An offer to which this Division applies:

(a) must remain open for at least 1 month after the date of offer; and

(b) cannot remain open for more than 12 months after the date of offer.

(2) The offer may be withdrawn by the offeror at any time, but not within 1 month of the date of offer.

(3) The offer may only be withdrawn by the offeror by sending a withdrawal document in printed or electronic form to the offeree in accordance with paragraphs 1019E(1)(a) and (b). The withdrawal document must identify the offeror and be dated.

(4) A purported withdrawal of the offer contrary to subsection (2) or (3) is ineffective.

1019H Terms of offer cannot be varied

(1) The terms of an offer to which this Division applies, as set out in the offer document, cannot be varied.

(2) A purported variation of the terms of the offer is ineffective.

(3) This section does not:

(a) affect the offeror’s obligation under section 1019J to update the market value of the financial product to which the offer relates; or

(b) prevent the offeror from withdrawing the offer in accordance with section 1019G or paragraph 1019J(2)(a) and making another offer on different terms; or

1019I Contents of offer document

(1) The offer document by which an offer to which this Division applies is made must identify the offeror and be dated (this date is the date of offer).

(2) The offer document must also contain the following:

(a) the price at which the offeror wishes to purchase the financial products;

(b) if the financial product is able to be traded on a licensed market and there is a market value for the product as traded on that market—the market value of the product as at the date of offer;

(c) if paragraph (b) does not apply—a fair estimate of the value of the product as at the date of offer, and an explanation of the basis on which that estimate was made;

(d) the period during which the offer remains open (which must be consistent with subsection 1019G(1));

(e) a statement to the effect that the offer may be withdrawn by sending a withdrawal document to the offeree, but generally not within 1 month of the date of offer;

(f) any other information specified in regulations made for the purposes of this paragraph.

(3) The regulations may clarify:

(a) the manner in which a fair estimate of the value of a financial product (see paragraph (2)(c)) is to be worked out; and

(b) the level of detail required in the explanation of the basis on which the estimate was made.

Regulations made for the purposes of this subsection have effect despite anything else in this section.

(4) The offer document must be worded and presented in a clear, concise and effective manner.

1019J Obligation to update market value

(1) This section applies if:

(a) the offer document by which an offer to which this Division applies is made states the market value of the financial product to which the offer relates as at the date of the offer; and

(b) while the offer remains open, there is an increase or decrease in the market value of the product when compared to:

(i) unless subparagraph (ii) applies—the market value (the currently stated value) stated as mentioned in paragraph (a); or

(ii) if this section has previously applied in relation to the offer and one or more supplementary offer documents have been sent to the offeree—the market value (the currently stated value) stated as mentioned in paragraph (3)(c) in the supplementary offer document most recently sent to the offeree; and

(c) the increase or decrease, expressed as a percentage of the currently stated value, exceeds the percentage specified in the regulations for the purposes of this paragraph.

(2) The offeror must, within 10 business days of this section applying because of a particular increase or decrease in value:

(a) withdraw the offer by sending a withdrawal document, in printed or electronic form, to the offeree in accordance with paragraphs 1019E(1)(a) and (b):

(i) that identifies the offeror and that is dated; and

(ii) that contains a statement to the effect that the offer is withdrawn because of a change in the market value of the product, and that withdrawal for this reason is permitted even within 1 month of the date of offer; or

(b) send a supplementary offer document (see subsection (3)) in printed or electronic form to the offeree in accordance with paragraphs 1019E(1)(a) and (b).

Nothing in section 1019G affects the effectiveness of a withdrawal of the offer under paragraph (a) of this subsection.

(3) A supplementary offer document must:

(a) identify the offer to which it relates; and

(b) be dated; and

(d) state the price that was stated in the offer document as required by paragraph 1019I(2)(a), and contain a statement to the effect that this is still the price at which the offeror wishes to purchase the product and that the terms of the offer remain unchanged; and

(e) contain a statement to the effect that the document has been prepared because the market value of the product has changed.

(4) A supplementary offer document must be worded and presented in a clear, concise and effective manner.

(5) In this section, a reference to stating a market value of a financial product includes a reference to purporting to state the market value of the product.

1019K Rights if requirements of Division not complied with

First situation covered by this section—offers to which this Division applies

(1) This section applies if, in relation to an offer to which this Division applies, the offeree (the seller) accepts the offer and enters into a contract for the sale of the financial product to the offeror (the buyer), and one or more of the following paragraphs applies:

(a) section 1019E was not complied with in relation to the offer;

(b) the offer was accepted after the period referred to in paragraph 1019G(1)(b);

(i) the offer document did not comply with section 1019I; or

(ii) there was a misleading or deceptive statement in the offer document;

(d) in a situation to which section 1019J applies, either:

(i) subsection 1019J(2) was not complied with; or

(ii) subsection 1019J(2) was complied with, but the offeree did not receive the withdrawal document, or the supplementary offer document, as the case requires, until after the offeree had accepted the offer;

(e) in a situation to which section 1019J applies, the offeror gave the offeree a supplementary offer document and either:

(i) the supplementary offer document did not comply with subsection 1019J(3); or

(ii) there was a misleading or deceptive statement in the supplementary offer document.

Second situation covered by this section—invitations prohibited by section 1019F

(2) This section applies if, in response to an invitation prohibited by section 1019F, a person (the seller) makes an offer to sell a financial product to the person who made the invitation (the buyer), and that person accepts the offer and enters into a contract for the purchase of that financial product from the seller.

Seller’s right to refuse to transfer, or to seek the return of, the financial product

(3) The seller has:

(a) the right to refuse to transfer the financial product to the buyer; or

(b) if the seller has already transferred the financial product to the buyer—the right to have the financial product returned to the seller, if the buyer still holds the product.

The seller’s right under paragraph (a) or (b) is conditional on the seller repaying any money that has been paid to the seller for the purchase of the financial product.

How the seller’s right is to be exercised

(4) The seller’s right under subsection (3) must be exercised by notifying the buyer in one of the following ways:

(a) in writing;

(b) electronically;

Also, if the regulations require the seller to comply with other requirements in order to exercise that right, those other requirements must be complied with.

(5) The seller’s right under subsection (3) can only be exercised during the period of 30 days starting on the day the contract was entered into.

Effect of exercise of seller’s right

(6) On the exercise of the seller’s right under subsection (3), the contract referred to in subsection (1) or (2) is, by force of this section, terminated from that time without penalty to the seller.

Regulations may provide for certain matters

(7) The regulations may provide for consequences and obligations (in addition to those provided for by subsection (6)) to apply if the seller’s right under subsection (3) is exercised.

(8) The regulations may provide that, in specified circumstances, the amount to be repaid as mentioned in subsection (3) is to be increased or reduced in accordance with the regulations.

Division 5B—Disclosure etc. in relation to short sales covered by securities lending arrangement of listed section 1020B products

Note: Section 1020B prohibits certain short sales of section 1020B products.

1020AA Definitions

(1) In this Division:

crossing: a crossing of section 1020B products is a sale of section 1020B products made by a financial services licensee:

(a) on behalf of both the buyer and the seller of the products; or

(b) on behalf of the buyer of the products and on its own behalf as seller of the products; or

section 1020B products has the meaning given by subsection 1020B(1).

securities lending arrangement means an arrangement under which:

(a) one entity (the lender) agrees that it will:

(i) deliver particular securities, managed investment products, foreign passport fund products or other financial products to another entity (the borrower) or to an entity nominated by the borrower; and

(ii) vest title in those products in the entity to which they are delivered; and

(b) the borrower agrees that it will, after the lender does the things mentioned in paragraph (a):

(i) deliver the products (or equivalent products) to the lender or to an entity nominated by the lender; and

(ii) vest title in those products (or those equivalent products) in the entity to which they are delivered.

(2) To avoid doubt, for the purposes of this Division, treat the entering into of an agreement to sell section 1020B products as the sale of the products.

(3) To avoid doubt, for the purposes of this Division, treat a financial services licensee as making a sale on behalf of a person if the sale is, in economic substance, made by the licensee for the person.

Example: A request that the sale be made is passed from the person to the financial services licensee through a chain of intermediaries.

(4) For the purposes of this Division, treat a crossing of section 1020B products as being made on a licensed market.

1020AB Seller disclosure

(1) Subsection (3) applies if:

(a) either:

(i) a financial services licensee, on behalf of a person (the seller), makes a sale in this jurisdiction of section 1020B products on a licensed market to a buyer; or

(ii) a financial services licensee (the seller), on its own behalf, makes a sale in this jurisdiction of section 1020B products on a licensed market to a buyer; and

(b) before the time of the sale, the seller had entered into or gained the benefit of a securities lending arrangement; and

(c) at the time of the sale, the seller intends that the securities lending arrangement will ensure that some or all the section 1020B products can be vested in the buyer; and

(d) the following requirements are satisfied (if applicable):

(i) if regulations made for the purposes of this subparagraph specify a kind of section 1020B product—the section 1020B products are of that kind;

(ii) if regulations made for the purposes of this subparagraph specify a kind of section 1020B product—the section 1020B products are not of that kind;

(iii) if regulations made for the purposes of this subparagraph specify circumstances in which the sale is made—the sale is made in those circumstances.

(2) Subsection (3) applies regardless of whether the seller is inside or outside Australia.

Offence

(3) The seller must:

(a) give the entity mentioned in subsection (4) particulars specified in the regulations in relation to the circumstances mentioned in paragraphs (1)(a), (b) and (c); and

(b) do so:

(i) on or before the time specified in the regulations; and

(ii) in the manner specified in the regulations.

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

(4) The entity is:

(a) if subparagraph (1)(a)(i) applies:

(i) the financial services licensee mentioned in that subparagraph; or

(ii) if the regulations specify another entity—that entity; or

(b) if subparagraph (1)(a)(ii) applies:

(i) the operator of the licensed market mentioned in that subparagraph; or

(ii) if the regulations specify another entity—that entity.

1020AC Licensee disclosure

(1) Subsection (2) applies if:

(a) the seller mentioned in subparagraph 1020AB(1)(a)(i) gives a financial services licensee information in accordance with section 1020AB in relation to a sale of section 1020B products on a licensed market; and

(b) the following requirements are satisfied (if applicable):

(i) if regulations made for the purposes of this subparagraph specify a kind of section 1020B product—the section 1020B products are of that kind;

(ii) if regulations made for the purposes of this subparagraph specify a kind of section 1020B product—the section 1020B products are not of that kind;

(iii) if regulations made for the purposes of this subparagraph specify circumstances in which the sale is made—the sale is made in those circumstances.

Offence

(2) The financial services licensee must:

(a) give the entity mentioned in subsection (3) particulars specified in the regulations in relation to the circumstances mentioned in paragraph (1)(a); and

(b) do so:

(i) on or before the time specified in the regulations; and

(ii) in the manner specified in the regulations.

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

(3) The entity is:

(a) the operator of the licensed market mentioned in paragraph (1)(a); or

(b) if the regulations specify another entity—that entity.

1020AD Public disclosure of information

(1) Subsection (2) applies if:

(a) any of the following apply, in relation to a sale of section 1020B products on a licensed market:

(i) the seller mentioned in subparagraph 1020AB(1)(a)(ii) gives information to the operator of a licensed market (or to another entity) in accordance with section 1020AB;

(ii) the financial services licensee mentioned in paragraph 1020AC(1)(a) gives information to the operator of a licensed market (or to another entity) in accordance with section 1020AC;

(iii) if regulations for the purposes of subparagraph 1020AB(4)(a)(ii) provide that the entity to which information is to be given in accordance with section 1020AB is the operator of a licensed market (or another entity)—the seller mentioned in subparagraph 1020AB(1)(a)(i) gives information to the operator (or other entity) in accordance with that section; and

(b) the following requirements are satisfied (if applicable):

(i) if regulations made for the purposes of this subparagraph specify a kind of section 1020B product—the section 1020B products are of that kind;

(ii) if regulations made for the purposes of this subparagraph specify a kind of section 1020B product—the section 1020B products are not of that kind;

(iii) if regulations made for the purposes of this subparagraph specify circumstances in which the sale is made—the sale is made in those circumstances.

Offence

(2) The operator (or the other entity) must:

(a) make a public disclosure of particulars specified in the regulations in relation to the information mentioned in paragraph (1)(a); and

(b) do so:

(i) on or before the time specified in the regulations; and

(ii) in the manner specified in the regulations.

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

1020AE Licensee’s obligation to ask seller about short sale

The financial services licensee must not make a sale in this jurisdiction of section 1020B products on a licensed market if:

(a) the sale is on behalf of a person (the seller); and

(b) the seller will be obliged under section 1020AB to give the financial services licensee information in relation to the sale; and

(i) before making the sale, the financial services licensee failed to ask the seller, orally or in writing, whether the seller will be obliged under section 1020AB to give the financial services licensee information in relation to the sale;

(ii) before making the sale, the financial services licensee failed to record, in writing, the seller’s answer.

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

Note 2: For the definition of writing, see section 25 of the Acts Interpretation Act 1901. For the application of the Acts Interpretation Act 1901 to this Act, see section 5C of this Act.

1020AF Regulations

(1) Regulations made for the purposes of this Division may specify a matter or thing differently for different kinds of persons, things or circumstances. For example, the regulations may:

(a) specify a matter or thing differently for different kinds of sellers mentioned in subsection 1020AB(1) or 1020AC(1); and

(b) specify a time differently for different kinds of circumstances.

Note: For specification by class, see subsection 13(3) of the Legislative Instruments Act 2003.

(2) Subsection (1) does not limit the regulations that may be made for the purposes of this Division.

Division 5C—Information about CGS depository interests

1020AG Jurisdictional scope of Division

(1) Section 1020AI applies only in relation to recommendations received in this jurisdiction.

(2) The regulations may make provision dealing with the jurisdictional scope of some or all of the other provisions of this Division. The other provisions of this Division have effect subject to any such regulations.

1020AH Definitions

In this Division:

CGS depository interest information website means a website that is prescribed by the regulations for the purposes of this definition.

information statement for a class of CGS depository interests means a document that:

(a) contains a statement that the document is an information statement for that class for the purposes of this Division; and

(b) contains information about all CGS depository interests of that class (whether or not it also contains information about CGS depository interests of another class); and

(d) is published on the CGS depository interest information website.

regulated person, in relation to a CGS depository interest, means:

(a) an issuer of the CGS depository interest; or

(b) any financial services licensee; or

(d) any person who is not required to hold an Australian financial services licence because the person is covered by:

(i) paragraph 911A(2)(j); or

(ii) an exemption in regulations made for the purposes of paragraph 911A(2)(k); or

(iii) an exemption specified by ASIC for the purposes of paragraph 911A(2)(l); or

(e) any person who is required to hold an Australian financial services licence but who does not hold such a licence.

1020AI Requirement to give information statements for CGS depository interest if recommending acquisition of interest

(1) A regulated person must give a person (the client) each information statement for a class of CGS depository interests if:

(a) the regulated person provides financial product advice to the client that consists of, or includes, a recommendation that the client acquire a CGS depository interest of that class; and

(b) the financial product advice is provided to the client as a retail client; and

Each information statement must be given at or before the time when the regulated person provides the advice and must be given in accordance with this Division.

Note: If the recommendation is to acquire CGS depository interests of a class for which there is an information statement and that is a subset of a wider class of CGS depository interests for which there is another information statement, the regulated person must give the client both information statements.

(2) However, the regulated person does not have to give the client an information statement for a class of CGS depository interests if:

(a) the client has already received that statement; or

(b) the regulated person reasonably believes that the client has received that statement.

Strict liability offence of failing to give statement

(3) A regulated person commits an offence if:

(a) the regulated person is required by this section to give another person an information statement for a class of CGS depository interests; and

(b) the regulated person does not give the other person, in accordance with section 1020AK, that statement by the time the regulated person is required to do so.

Note: A defendant bears an evidential burden in relation to the matter in subsection (2). See subsection 13.3(3) of the Criminal Code.

(4) An offence based on subsection (3) is an offence of strict liability.

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

Ordinary offence of failing to give statement

(5) A regulated person commits an offence if:

(a) the regulated person is required by this section to give another person an information statement for a class of CGS depository interests; and

(b) the regulated person does not give the other person, in accordance with section 1020AK, that statement by the time the regulated person is required to do so.

Note: A defendant bears an evidential burden in relation to the matter in subsection (2).

Defence for authorised representative

(6) In any proceedings against an authorised representative of a financial services licensee for an offence based on subsection (3) or (5), it is a defence if:

(a) the licensee had provided the representative with information or instructions about the giving of information statements for a class of CGS depository interests; and

(b) the representative’s failure to give an information statement for that class occurred because the representative was acting in reliance on that information or those instructions; and

Note: A defendant bears an evidential burden in relation to the matters in subsection (6). See subsection 13.3(3) of the Criminal Code.

Offence of failing to ensure authorised representative gives statement

(7) A financial services licensee commits an offence if the licensee does not take reasonable steps to ensure that an authorised representative of the licensee complies with the representative’s obligations under this section to give each information statement for a class of CGS depository interests as and when required by this section.

1020AJ Information statement given must be up to date

A regulated person must not, in purported compliance with this Division, give a person at a time a document that:

(a) purports to be an information statement for a class of CGS depository interests; and

(b) is not an information statement for that class published at that time on the CGS depository interest information website.

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

1020AK How an information statement is to be given

(1) An information statement for a class of CGS depository interests:

(a) must be:

(i) given to a person, or the person’s agent, personally; or

(ii) sent to the person, or the person’s agent, at an address (including an electronic address) or fax number nominated by the person or the agent; and

(b) may be printed or be in electronic form.

(2) For the purposes of this section, the information statement is sent to a person at an address if, and only if:

(a) the information statement is sent to the address; and

(b) either:

(i) the envelope or other container in which the information statement is sent; or

(ii) the message that accompanies the information statement;

is addressed to the person.

(3) The information statement may be given or sent to the person’s agent only if the agent is not acting as the person’s agent in one of the following capacities:

(a) a financial services licensee;

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

(i) paragraph 911A(2)(j); or

(ii) an exemption in regulations made for the purposes of paragraph 911A(2)(k); or

(iii) an exemption specified by ASIC for the purposes of paragraph 911A(2)(l);

(d) a person who is required to hold an Australian financial services licence but who does not hold such a licence;

(e) an employee, director or other representative of a person referred to in paragraph (a), (b), (c) or (d).

(4) The regulations may provide for other ways of giving an information statement for a class of CGS depository interests.

(5) The regulations may specify requirements as to the manner in which an information statement for a class of CGS depository interests may be given to a person. The giving of the information statement is not effective unless those requirements are satisfied.

1020AL Civil action for loss or damage

(1) A person (the client) who suffers loss or damage for a reason described in column 1 of an item of the table may recover the amount of the loss or damage by action begun against a person indicated in column 2 of that item within 6 years after the loss or damage was suffered.

Recovery of amount of loss or damage
	Column 1 Reason for loss or damage	Column 2 Person amount may be recovered from
1	The client was not given an information statement for a class of CGS depository interests as and when required by this Division	The person required to give the statement or, if that person was an authorised representative of a financial services licensee, each such licensee responsible for the person’s conduct (see subsection (2))
2	The client was given at a time, in purported compliance with this Division, a document that: (a) purported to be an information statement for a class of CGS depository interests; and (b) was not an information statement for that class that was published at that time on the CGS depository interest information website	Each person who: (a) directly or indirectly caused or contributed to the giving of the document; and (b) did not take reasonable steps to ensure that the document given would be an information statement published at that time on the CGS depository interest information website

(2) A financial services licensee is responsible for the conduct of an authorised representative of the licensee for the purposes of item 1 of the table in subsection (1), and the authorised representative is not liable under that item, if:

(a) the authorised representative is not an authorised representative of any other financial services licensee; or

(b) the licensee is responsible (alone or jointly and severally with other financial services licensees) for the authorised representative’s conduct under section 917C, disregarding sections 917D and 917F.

(3) This section does not affect any liability that a person has under any other law.

Other orders

(4) The court dealing with an action under subsection (1) may, in addition to awarding loss or damage under that subsection and if it thinks it necessary in order to do justice between the parties:

(a) make an order declaring void a contract entered into by the client referred to in that subsection for or relating to a financial product or a financial service; and

(b) if it makes an order under paragraph (a)—make such other order or orders as it thinks are necessary or desirable because of that order.

(5) Without limiting paragraph (4)(b), the orders that may be made under that paragraph include (but are not limited to) an order for the return of money paid by a person, and/or an order for payment of an amount of interest specified in, or calculated in accordance with, the order.

Division 6—Miscellaneous

1020A Offers etc. relating to certain managed investment schemes not to be made in certain circumstances

(1) A person must not engage in conduct of a kind referred to in subsection (2) in relation to a financial product described in paragraph 764A(1)(ba) (which relates to certain managed investment schemes that are not registered schemes) if the managed investment scheme concerned needs to be, or will need to be, registered and has not been registered. This is so even if it is proposed to register the scheme.

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

(2) Subject to subsection (3), the kinds of conduct that must not be engaged in in relation to such a managed investment product are as follows:

(a) making a recommendation, as described in subsection 1012A(3), that is received in this jurisdiction;

(b) making an offer, as described in subsection 1012B(3) or 1012C(3), that is received in this jurisdiction;

(3) Subsection (2) does not apply to a recommendation or offer made in a situation to which a subsection of section 1012D, other than subsection 1012D(1), applies.

Note: A defendant bears an evidential burden in relation to the matters in this subsection. See subsection 13.3(3) of the Criminal Code.

1020BAA Offers etc. relating to foreign passport funds not to be made in certain circumstances

(1) A person must not engage in conduct of a kind referred to in subsection (2) in relation to an interest in a foreign passport fund if the fund is not:

(a) a notified foreign passport fund; or

(b) a registered scheme.

This is so even if it is proposed that the fund will become a notified foreign passport fund or a registered scheme.

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

(2) Subject to subsection (3), the kinds of conduct that must not be engaged in in relation to an interest in such a foreign passport fund are as follows:

(a) making a recommendation, as described in subsection 1012A(3), that is received in this jurisdiction;

(b) making an offer, as described in subsection 1012B(3) or 1012C(3), that is received in this jurisdiction;

(3) Subsection (2) does not apply to:

(a) a recommendation or offer made in a situation to which a subsection of section 1012D, other than subsection 1012D(1), applies; or

(b) a recognised offer.

1020B Prohibition of certain short sales of securities, managed investment products, foreign passport fund products and certain other financial products

(1) In this section and in Division 5B:

section 1020B products means:

(a) securities; or

(b) managed investment products; or

(ba) foreign passport fund products; or

(d) financial products of any other kind prescribed by regulations made for the purposes of this definition.

(2) Subject to this section and the regulations, a person must only, in this jurisdiction, sell section 1020B products to a buyer if, at the time of the sale:

(a) the person has or, if the person is selling on behalf of another person, that other person has; or

(b) the person believes on reasonable grounds that the person has, or if the person is selling on behalf of another person, that other person has;

a presently exercisable and unconditional right to vest the products in the buyer.

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

(3) For the purposes of subsection (2):

(a) a person who, at a particular time, has a presently exercisable and unconditional right to have section 1020B products vested in the person, or in accordance with the directions of the person, has at that time a presently exercisable and unconditional right to vest the products in another person; and

(b) a right of a person to vest section 1020B products in another person is not conditional merely because the products are subject to a security interest in favour of another person to secure the repayment of money.

(4) Subsection (2) does not apply in relation to a sale of section 1020B products by a person who, before the time of sale, has entered into a contract to buy those products and who has a right to have those products vested in the person that is conditional only upon all or any of the following:

(a) payment of the consideration in respect of the purchase;

(b) the receipt by the person of a proper instrument of transfer in respect of the products;

(7) For the purposes of this section, a person who:

(a) purports to sell section 1020B products; or

(b) offers to sell section 1020B products; or

(d) instructs a financial services licensee to sell section 1020B products;

is taken to sell the products.

1020D Part cannot be contracted out of

A condition of a contract for the acquisition of a financial product is void if it provides that a party to the contract is:

(a) required or bound to waive compliance with any requirement of this Part (or of regulations made for the purposes of this Part); or

(b) if the acquisition occurs in circumstances in which the party is required by a provision of this Part to have been given a Product Disclosure Statement for the product—taken to have notice of any contract, document or matter not specifically referred to in a Product Disclosure Statement or Supplementary Product Disclosure Statement given to the party.

1020E Stop orders by ASIC

(1) This section applies if:

(a) either:

(i) a disclosure document or statement is defective (see subsection (11)); or

(ia) a disclosure document or statement does not comply with a requirement of this Part that it be worded and presented in a clear, concise and effective manner; or

(ii) an advertisement or statement of a kind referred to in subsection 1018A(1) or (2) that relates to financial products is defective (see subsection (11)); or

(b) an issuer of financial products is in breach of section 1017G; or

(c) information made publicly available under section 1017BA or 1017BB, or provided under subsection 1017BC(3), is defective (see subsection (11)).

(2) ASIC may order that:

(a) if paragraph (1)(a) applies—specified conduct in respect of the financial products to which the document, advertisement or statement relates; or

(b) if paragraph (1)(b) applies—specified conduct in respect of financial products issued by that issuer; or

(c) if paragraph (1)(c) applies—specified conduct in respect of the financial products or other property to which the information relates;

must not be engaged in while the order is in force.

(3) The order may include a statement that specified conduct engaged in contrary to the order will be regarded as not complying with the requirements of a specified provision of this Part.

(4) Before making an order under subsection (2), ASIC must:

(a) hold a hearing; and

(b) give a reasonable opportunity to any interested people to make oral or written submissions to ASIC on whether an order should be made.

(5) If ASIC considers that any delay in making an order under subsection (2) pending the holding of a hearing would be prejudicial to the public interest, ASIC may make an interim order under that subsection. The interim order may be made without holding a hearing and lasts for 21 days after the day on which it is made unless revoked before then.

(6) At any time during the hearing, ASIC may make an interim order under subsection (2). The interim order lasts until:

(a) ASIC makes an order under subsection (2) after the conclusion of the hearing; or

(b) the interim order is revoked;

whichever happens first.

(7) The order under subsection (2) must be in writing and must be served on:

(a) unless paragraph (b), (c) or (d) applies—the issuer of the financial products concerned; or

(b) if paragraph (1)(a) applies and the document, advertisement or statement relates to a sale or proposed sale of the financial products—the seller of the financial products; or

(c) if subparagraph (1)(a)(i) applies and the disclosure document or statement is an offer document of a kind referred to in section 1019E or a supplementary offer document of a kind referred to in section 1019J—the offeror referred to in subsection 1019D(1); or

(d) if paragraph (1)(c) applies—the person who made the information publicly available or who provided the information.

(8) The person on whom the order is served must take reasonable steps to ensure that other people who engage in conduct to which the order applies are aware of the order.

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

(9) The person on whom the order is served, or a person who is aware of the order, must not engage in conduct contrary to the order.

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

(10) If the person on whom the order is served, or a person who is aware of the order, engages in conduct contrary to the order, any relevant statement included in the order under subsection (3) has effect accordingly. This applies in addition to any other consequence that is provided for by this Act.

(11) In this section:

defective:

(a) in relation to a disclosure document or statement—has the same meaning as in Subdivision B of Division 7; and

(b) in relation to an advertisement or statement of a kind referred to in subsection 1018A(1) or (2) that relates to financial products—means:

(i) there is a misleading or deceptive statement in the advertisement or statement; or

(ii) there is an omission from the advertisement or statement of material required by paragraph 1018A(1)(c), (d) or (e), or paragraph 1018A(2)(c), (d), (e) or (f), to be included in the advertisement or statement; and

(i) the information has not been updated as required by that section; or

(ii) the information is otherwise misleading or deceptive; or

(iii) there is an omission from the information; and

(d) in relation to information made publicly available under section 1017BB or information provided under section 1017BC—means:

(i) the information is misleading or deceptive; or

(ii) there is an omission from the information.

disclosure document or statement has the same meaning as it has in Subdivision B of Division 7.

1020F Exemptions and modifications by ASIC

(1) ASIC may:

(a) exempt a person or class of persons from all or specified provisions of this Part; or

(b) exempt a financial product or a class of financial products from all or specified provisions of this Part; or

(c) declare that this Part applies in relation to a person or a financial product, or a class of persons or financial products, as if specified provisions were omitted, modified or varied as specified in the declaration.

(4) An exemption may apply unconditionally or subject to specified conditions. A person to whom a condition specified in an exemption applies must comply with the condition. The Court may order the person to comply with the condition in a specified way. Only ASIC may apply to the Court for the order.

(5) An exemption or declaration must be in writing and ASIC must publish notice of it in the Gazette.

(6) If conduct (including an omission) of a person would not have constituted an offence if a particular declaration under paragraph (1)(c) had not been made, that conduct does not constitute an offence unless, before the conduct occurred (in addition to complying with the gazettal requirement of subsection (5)):

(a) the text of the declaration was made available by ASIC on the internet; or

(b) ASIC gave written notice setting out the text of the declaration to the person.

In a prosecution for an offence to which this subsection applies, the prosecution must prove that paragraph (a) or (b) was complied with before the conduct occurred.

(7) For the purpose of this section, the provisions of this Part include:

(a) definitions in this Act, or in the regulations, as they apply to references in this Part; and

(b) any provisions of Part 10.2 (transitional provisions) that relate to provisions of this Part.

Note: Because of section 761H, a reference to this Part or Part 10.2 also includes a reference to regulations or other instruments made for the purposes of this Part or Part 10.2 (as the case requires).

(8) To avoid doubt, a declaration under paragraph (1)(c) may specify omissions, modifications or variations that have any or all of the following effects:

(a) suspending, prohibiting or limiting:

(i) any form of short selling of financial products; or

(ii) any transaction that has the same or substantially similar market effect as a short sale of financial products;

(b) varying requirements under this Part that apply to:

(i) any form of short selling of financial products; or

(ii) any transaction that has the same or substantially similar market effect as a short sale of financial products;

(i) any form of short selling of financial products; or

(ii) any transaction that has the same or substantially similar market effect as a short sale of financial products;

(d) imposing requirements that apply to:

(i) any form of short selling of financial products; or

(ii) any transaction that has the same or substantially similar market effect as a short sale of financial products.

1020G Exemptions and modifications by regulations

(1) The regulations may:

(a) exempt a person or class of persons from all or specified provisions of this Part; or

(b) exempt a financial product or a class of financial products from all or specified provisions of this Part; or

(c) provide that this Part applies as if specified provisions were omitted, modified or varied as specified in the regulations.

(3) For the purpose of this section, the provisions of this Part include:

(a) definitions in this Act, or in the regulations, as they apply to references in this Part; and

(b) any provisions of Part 10.2 (transitional provisions) that relates to provisions of this Part.

Division 7—Enforcement

Subdivision A—Offences

1021A Overview

This Subdivision contains provisions creating offences by reference to various rules contained in preceding Divisions of this Part. However, it does not create all the offences relating to those rules, as some offences are created by subsection 1311(1). Where offences are created by subsection 1311(1) in relation to a rule, this is indicated by a note at the end of the provision containing the rule.

1021B Definitions

(1) In this Subdivision:

defective, in relation to a disclosure document or statement, means:

(a) there is a misleading or deceptive statement in the disclosure document or statement; or

(b) if it is a Product Disclosure Statement—there is an omission from the Product Disclosure Statement of material required by section 1013C, other than material required by section 1013B or 1013G; or

(c) if it is a Supplementary Product Disclosure Statement that is given for the purposes of section 1014E—there is an omission from the Supplementary Product Disclosure Statement of material required by that section; or

(d) if it is information required by paragraph 1012G(3)(a)—there is an omission from the information of material required by that paragraph;

being a statement, or an omission, that is or would be materially adverse from the point of view of a reasonable person considering whether to proceed to acquire the financial product concerned.

Note: In determining whether a Product Disclosure Statement is defective, the effect of section 1014D must be taken into account (section 1014D takes information and statements in a Supplementary Product Disclosure Statement to be included in the Product Disclosure Statement it supplements).

disclosure document or statement means:

(a) a Product Disclosure Statement; or

(b) a Supplementary Product Disclosure Statement; or

regulated person has the same meaning as it has in Division 2.

(1A) For the avoidance of doubt, if section 1012J (information must be up to date) is not complied with in relation to a Product Disclosure Statement, then, for the purposes of the definition of defective in subsection (1):

(a) if the circumstance constituting the non‑compliance is that particular information included in the Product Disclosure Statement is not as up to date as section 1012J requires it to be—the information so included constitutes a misleading statement in the Product Disclosure Statement; and

(b) if the circumstance constituting the non‑compliance is a failure to include particular information that was not previously required to be included in the Product Disclosure Statement—the failure to include the information constitutes an omission from the Statement of material required by section 1013C.

Note 1: The effect of section 1014D (information in a Supplementary Product Disclosure Statement is taken to be contained in the Product Disclosure Statement it supplements) must be taken into account in determining whether section 1012J is complied with in relation to a Product Disclosure Statement.

Note 2: Whether the inclusion of out of date information, or the failure to include information, results in the Product Disclosure Statement being defective as defined in subsection (1) depends on whether the materiality test set out in that definition is satisfied.

(2) In this Subdivision, a reference (including in the definitions in subsection (1)) to a document or statement, or to information, of a kind referred to in a paragraph of the definition of disclosure document or statement in subsection (1) includes a reference to something purporting to be a document or statement, or to be information, of that kind.

1021C Offence of failing to give etc. a disclosure document or statement

Strict liability offence

(1) A person (the providing entity) commits an offence if:

(a) the providing entity:

(i) is required by a provision of this Part to give another person a Product Disclosure Statement or a Supplementary Product Disclosure Statement (the required disclosure document or statement); or

(ii) is required by paragraph 1012G(3)(a) to orally communicate information (the required disclosure document or statement) to another person; and

(b) the providing entity does not:

(i) if subparagraph (a)(i) applies—give (in accordance with section 1015C) the other person anything purporting to be the required disclosure document or statement by the time they are required to do so; or

(ii) if subparagraph (a)(ii) applies—orally communicate to the other person anything purporting to be the information required by paragraph 1012G(3)(a) by the time they are required to do so.

Note: A defendant bears an evidential burden in relation to the matters in sections 1012D, 1012DAA, 1012DA and 1012E.

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

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

Ordinary offence

(3) A person (the providing entity) commits an offence if:

(a) the providing entity:

(i) is required by a provision of this Part to give another person a Product Disclosure Statement or a Supplementary Product Disclosure Statement (the required disclosure document or statement); or

(ii) is required by paragraph 1012G(3)(a) to orally communicate information (the required disclosure document or statement) to another person; and

(b) the providing entity does not:

(ii) if subparagraph (a)(ii) applies—orally communicate to the other person anything purporting to be the information required by paragraph 1012G(3)(a) by the time they are required to do so.

Note: A defendant bears an evidential burden in relation to the matters in sections 1012D, 1012DAA, 1012DA and 1012E.

Defence for authorised representative

(4) In any proceedings against an authorised representative of a financial services licensee for an offence based on subsection (1) or (3), it is a defence if:

(a) the licensee had provided the representative with information or instructions about the giving or communication of disclosure documents or statements; and

(b) the representative’s failure to give or communicate the required disclosure document or statement occurred because the representative was acting in reliance on that information or those instructions; and

Note: A defendant bears an evidential burden in relation to the matters in subsection (4). See subsection 13.3(3) of the Criminal Code.

Circumstances in which a person is taken not to contravene this section

(5) If:

(a) a person does not give another person a Product Disclosure Statement for a financial product because of section 1012DAA or 1012DA; and

(b) a notice was given under subsection 1012DAA(2) or 1012DA(5); and

(c) the notice purported to comply with subsection 1012DAA(7) or 1012DA(6) but did not actually comply with that subsection;

the person is taken not to contravene this section.

1021D Offence of preparer of defective disclosure document or statement giving the document or statement knowing it to be defective

(1) A person commits an offence if:

(a) the person prepares (or has someone else prepare for them) a disclosure document or statement (not being information required by paragraph 1012G(3)(a)); and

(b) the person knows that the disclosure document or statement is defective; and

(i) gives (see subsection (3)) another person the disclosure document or statement in circumstances in which it is required by a provision of this Part to be given to the other person; or

(ii) gives (see subsection (3)), or makes available to, another person the disclosure document or statement reckless as to whether the other person will or may rely on the information in it.

Note: A defendant bears an evidential burden in relation to the matters in sections 1012D, 1012DAA, 1012DA and 1012E.

(2) A person commits an offence if:

(a) the person prepares (or has someone else prepare for them) a disclosure document or statement (not being information required by paragraph 1012G(3)(a)); and

(b) the person knows that the disclosure document or statement is defective; and

(c) the person gives (see subsection (3)), or makes available to, another person the disclosure document or statement, reckless as to whether the other person, or someone else, will or may give it, or make it available, to another person as mentioned in subparagraph (1)(c)(i) or (ii).

(3) In this section, give means give by any means (including orally), and is not limited to giving in accordance with section 1015C.

1021E Offence of preparer of defective disclosure document or statement giving the document or statement (whether or not known to be defective)

(1) A person commits an offence if:

(a) the person prepares (or has someone else prepare for them) a disclosure document or statement (not being information required by paragraph 1012G(3)(a)); and

(b) the disclosure document or statement is defective; and

(i) gives (see subsection (5)) another person the disclosure document or statement in circumstances in which it is required by a provision of this Part to be given to the other person; or

(ii) gives (see subsection (5)), or makes available to, another person a disclosure document or statement, reckless as to whether the other person will or may rely on the information in it.

Note: A defendant bears an evidential burden in relation to the matters in sections 1012D, 1012DAA, 1012DA and 1012E.

(2) A person commits an offence if:

(a) the person prepares (or has someone else prepare for them) a disclosure document or statement (not being information required by paragraph 1012G(3)(a)); and

(b) the disclosure document or statement is defective; and

(c) the person gives (see subsection (5)), or makes available to, another person the disclosure document or statement, reckless as to whether the other person, or someone else, will or may give it, or make it available, to another person as mentioned in subparagraph (1)(c)(i) or (ii).

(3) For the purposes of an offence based on subsection (1) or (2), strict liability applies to the physical element of the offence specified in paragraph (1)(b) or (2)(b).

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

(4) In any proceedings against a person for an offence based on subsection (1) or (2), it is a defence if the person took reasonable steps to ensure that the disclosure document or statement would not be defective.

Note: A defendant bears an evidential burden in relation to the matters in subsection (4). See subsection 13.3(3) of the Criminal Code.

(5) In this section, give means give by any means (including orally), and is not limited to giving in accordance with section 1015C.

1021F Offence of regulated person (other than preparer) giving disclosure document or statement knowing it to be defective

(1) A regulated person commits an offence if:

(a) another person prepares (or has someone else prepare for them) a disclosure document or statement (not being information required by paragraph 1012G(3)(a)); and

(b) the regulated person knows that the disclosure document or statement is defective; and

(i) gives (see subsection (2)) another person the disclosure document or statement in circumstances in which it is required by a provision of this Part to be given to the other person; or

(ii) gives (see subsection (2)), or makes available to, another person the disclosure document or statement, reckless as to whether the other person will or may rely on the information in it.

Note: A defendant bears an evidential burden in relation to the matters in sections 1012D, 1012DAA, 1012DA and 1012E.

(2) In this section, give means give by any means (including orally), and is not limited to giving in accordance with section 1015C.

1021FA Paragraph 1012G(3)(a) obligation—offences relating to communication of information

Offence where information known to be defective

(1) A person (the providing entity) commits an offence if:

(a) the providing entity communicates information required by paragraph 1012G(3)(a) to another person in circumstances in which the providing entity is required to do so; and

(b) the providing entity knows that the information is defective.

Note: A defendant bears an evidential burden in relation to the matters in sections 1012D and 1012E.

Offence whether or not information known to be defective

(2) A person (the providing entity) commits an offence if:

(a) the providing entity communicates information required by paragraph 1012G(3)(a) to another person in circumstances in which the providing entity is required to do so; and

(b) the information is defective.

Note: A defendant bears an evidential burden in relation to the matters in sections 1012D and 1012E.

(3) For the purposes of an offence based on subsection (2), strict liability applies to the physical element of the offence specified in paragraph (2)(b).

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

Defences

(4) In any proceedings against a person for an offence based on subsection (1) or (2), it is a defence if the person took reasonable steps to ensure that the information communicated would not be defective.

Note: A defendant bears an evidential burden in relation to the matters in subsection (4). See subsection 13.3(3) of the Criminal Code.

(5) In any proceedings against a person for an offence based on subsection (2), it is a defence if the information communicated was defective because of information, or an omission from information, provided to the person (whether in a document or otherwise) by the issuer of the financial product concerned.

Note: A defendant bears an evidential burden in relation to the matters in subsection (5). See subsection 13.3(3) of the Criminal Code.

1021FB Paragraph 1012G(3)(a) obligation—offences relating to information provided by product issuer for communication by another person

Product issuer knows information is defective

(1) The issuer of a financial product commits an offence if:

(a) the issuer provides information (whether in a document or otherwise) relating to the product to a person:

(i) for the purpose of the information being communicated under paragraph 1012G(3)(a); or

(ii) knowing that it is likely that the information will be so communicated; and

(b) the issuer knows that, if the person communicates the provided information for the purpose of paragraph 1012G(3)(a), the information communicated will be defective.

Product issuer knows information is not all the required information

(2) The issuer of a financial product commits an offence if:

(a) the issuer provides information (whether in a document or otherwise) relating to the product to a person:

(i) for the purpose of it being communicated under paragraph 1012G(3)(a); or

(ii) knowing that it is likely that it will be so communicated; and

(b) the provided information relates to a matter or matters, but the issuer knows that it is not all of the information relating to the matter or matters that is required to be so communicated; and

(c) the issuer is reckless as to whether the person will or may communicate information for the purposes of paragraph 1012G(3)(a) on the basis that the provided information is all the information relating to the matter or matters that is required to be so communicated.

Product issuer provides information that results in information required by paragraph 1012G(3)(a) being defective

(3) The issuer of a financial product commits an offence if:

(a) the issuer provides information (whether in a document or otherwise) relating to the product to a person:

(i) for the purpose of it being communicated under paragraph 1012G(3)(a); or

(ii) knowing that it is likely that it will be so communicated; and

(b) the person communicates the information for the purpose of paragraph 1012G(3)(a); and

(c) the information communicated is defective because it includes the provided information (whether or not it is defective for other reasons).

(4) For the purposes of an offence based on subsection (3), strict liability applies to the physical element of the offence specified in paragraph (3)(c).

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

Defence to subsection (3) offence

(5) In any proceedings against the issuer of a financial product for an offence based on subsection (3), it is a defence if the issuer took reasonable steps to ensure that the information they provided would not be such as to make the information communicated for the purpose of paragraph 1012G(3)(a) defective.

Note: A defendant bears an evidential burden in relation to the matters in subsection (5). See subsection 13.3(3) of the Criminal Code.

Product issuer does not provide all the required information

(6) The issuer of a financial product commits an offence if:

(a) the issuer provides information (whether in a document or otherwise) relating to the product to a person:

(i) for the purpose of it being communicated under paragraph 1012G(3)(a); or

(ii) knowing that it is likely that it will be so communicated; and

(b) the provided information relates to a matter or matters, but it is not all of the information relating to the matter or matters that is required to be so communicated; and

(c) the person communicates information for the purpose of paragraph 1012G(3)(a) on the basis that the provided information is all the information relating to the matter or matters that is required to be so communicated; and

(d) the information communicated is defective because it includes only that information about the matter or matters (whether or not it is also defective for other reasons).

(7) For the purposes of an offence based on subsection (6), strict liability applies to the physical elements of the offence specified in paragraphs (6)(b) and (d).

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

Defence to subsection (6) offence

(8) In any proceedings against the issuer of a financial product for an offence based on subsection (6), it is a defence if the issuer took reasonable steps to ensure that the information they provided about the matter or matters would be all the information about the matter or matters that would be required by paragraph 1012G(3)(a) to be communicated.

Note: A defendant bears an evidential burden in relation to the matters in subsection (8). See subsection 13.3(3) of the Criminal Code.

1021G Offence of financial services licensee failing to ensure authorised representative gives etc. disclosure documents or statements as required

A financial services licensee commits an offence if the licensee does not take reasonable steps to ensure that an authorised representative of the licensee complies with their obligations under this Part to give or communicate disclosure documents or statements as and when required by this Part.

1021H Offences if a Product Disclosure Statement (or Supplementary PDS) does not comply with certain requirements

(1) A person commits an offence if:

(a) the person prepares (or has someone else prepare for them) a Product Disclosure Statement, a Supplementary Product Disclosure Statement or a Replacement Product Disclosure Statement (the disclosure document); and

(b) the disclosure document does not comply with:

(i) if it is a Product Disclosure Statement—section 1013B or 1013G or subsection 942DA(3); or

(ii) if it is a Supplementary Product Disclosure Statement—section 1013G, 1014B or 1014C; or

(iii) if it is a Replacement Product Disclosure Statement—subsection 942DA(3), section 1013G or subsection 1014K(1), (2) or (3); and

(i) gives (see subsection (3)) another person the disclosure document in circumstances in which it is required by a provision of this Part to be given to the other person; or

(ii) gives (see subsection (3)), or makes available to, another person the disclosure document, reckless as to whether the other person will or may rely on the information in it; or

(iii) gives (see subsection (3)), or makes available to, another person the disclosure document, reckless as to whether the other person, or someone else, will or may give it, or make it available, to another person as mentioned in subparagraph (i) or (ii).

Note: A defendant bears an evidential burden in relation to the matters in sections 1012D, 1012DAA, 1012DA and 1012E.

(2) For the purposes of an offence based on subsection (1), strict liability applies to paragraph (b) of that subsection.

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

(3) In this section, give means give by any means (including orally), and is not limited to giving in accordance with section 1015C.

1021I Offence of giving disclosure document or statement that has not been prepared by the appropriate person

(1) A regulated person commits an offence if:

(a) the regulated person:

(i) gives (see subsection (2)) another person a disclosure document or statement (not being information required by paragraph 1012G(3)(a)) in circumstances in which it is required by a provision of this Part to be given to the other person; or

(ii) gives (see subsection (2)), or makes available to, another person a disclosure document or statement (not being information required by paragraph 1012G(3)(a)), reckless as to whether the other person will or may rely on the information in it; and

(b) the disclosure document or statement has not been prepared by, or on behalf of, the person required by section 1013A to prepare it.

Note: A defendant bears an evidential burden in relation to the matters in sections 1012D, 1012DAA, 1012DA and 1012E.

(2) In this section, give means give by any means (including orally), and is not limited to giving in accordance with section 1015C.

1021J Offences if preparer etc. of disclosure document or statement becomes aware that it is defective

(1) A person commits an offence if:

(a) the person prepares (or has someone else prepare for them) a disclosure document or statement (not being information required by paragraph 1012G(3)(a)); and

(b) the person becomes aware that the disclosure document or statement is defective; and

(c) the person does not, as soon as practicable, take reasonable steps to ensure that any regulated person to whom the disclosure document or statement has been provided for further distribution is given a direction that satisfies one of more of the following subparagraphs:

(i) a direction not to distribute the disclosure document or statement;

(ii) if it is a Product Disclosure Statement—a direction not to distribute the Product Disclosure Statement unless it is accompanied by a Supplementary Product Disclosure Statement that corrects the deficiency;

(iii) if it is a Product Disclosure Statement or a Supplementary Product Disclosure Statement—a direction not to distribute the Product Disclosure Statement or Supplementary Product Disclosure Statement without first altering it in a way that is specified in the direction, being a way that corrects the deficiency and that complies with section 1015E.

(2) A regulated person commits an offence if:

(a) the person is given a direction referred to in paragraph (1)(c); and

(b) the person does not comply with the direction.

(3) A regulated person commits an offence if:

(a) a disclosure document or statement (not being information required by paragraph 1012G(3)(a)) has been provided to the person for distribution; and

(b) the person becomes aware that the disclosure document or statement is defective; and

(c) the person does not take reasonable steps to notify the person by whom, or on whose behalf, the disclosure document or statement was prepared of the particulars of the deficiency.

(4) In this section, a reference to distributing a disclosure document or statement includes (but is not limited to) giving the document or statement to another person in purported compliance with a requirement of this Part.

1021K Offence of unauthorised alteration of Product Disclosure Statement (or Supplementary PDS)

(1) A person commits an offence if:

(a) the person engages in conduct that results in an alteration of a Product Disclosure Statement or a Supplementary Product Disclosure Statement that has been prepared by or on behalf of another person (the responsible person); and

(b) the alteration results in the Product Disclosure Statement or Supplementary Product Disclosure Statement becoming defective, or more defective than it previously was; and

(d) either:

(i) the person, in purported compliance with a provision of this Part, gives (see subsection (2)) the altered Product Disclosure Statement or Supplementary Product Disclosure Statement to another person; or

(ii) the person gives (see subsection (2)), or makes available to, another person the altered Product Disclosure Statement or Supplementary Product Disclosure Statement, reckless as to whether the other person will or may rely on the information in it; or

(iii) the person gives (see subsection (2)), or makes available to, another person the altered Product Disclosure Statement or Supplementary Product Disclosure Statement, reckless as to whether the other person, or someone else, will or may give it, or make it available, to another person as mentioned in subparagraph (i) or (ii).

(2) In this section, give means give by any means (including orally), and is not limited to giving in accordance with section 1015C.

1021L Offences of giving, or failing to withdraw, consent to inclusion of defective statement

(1) A person commits an offence if:

(a) they consent to the inclusion of a statement (the consented material) in a Product Disclosure Statement or a Supplementary Product Disclosure Statement as mentioned in paragraph 1013K(1)(a); and

(b) either:

(i) there is a misleading or deceptive statement in the consented material; or

(ii) there is an omission of information from the consented material; and

(c) the statement or omission is or would be materially adverse from the point of view of a reasonable person considering whether to proceed to acquire the financial product concerned.

(2) A person commits an offence if:

(a) they consent to the inclusion of a statement (the consented material) in a Product Disclosure Statement or a Supplementary Product Disclosure Statement as mentioned in paragraph 1013K(1)(a); and

(b) they become aware that either:

(i) there is a misleading or deceptive statement in the consented material; or

(ii) there is an omission of information from the consented material;

being a statement, or an omission, that:

(iii) is or would be materially adverse from the point of view of a reasonable person considering whether to proceed to acquire the financial product concerned; or

(iv) results in the Product Disclosure Statement or the Supplementary Product Disclosure Statement being defective, or more defective than it would otherwise be; and

1021M Offences relating to keeping and providing copies of Product Disclosure Statements (or Supplementary PDSs)

Strict liability offence

(1) A person commits an offence if:

(a) the person is required by section 1015D:

(i) to notify ASIC that a Product Disclosure Statement or a Supplementary Product Disclosure Statement is in use; or

(ii) to keep a copy of a Product Disclosure Statement or a Supplementary Product Disclosure Statement for a particular period; or

(iii) to make a copy of a Product Disclosure Statement or a Supplementary Product Disclosure Statement available to ASIC; or

(iv) to comply with a request from a person for a copy of a Product Disclosure Statement or a Supplementary Product Disclosure Statement; and

(b) the person does not comply with that requirement.

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

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

Ordinary offence

(3) A person commits an offence if:

(a) the person is required by section 1015D:

(i) to notify ASIC that a Product Disclosure Statement or a Supplementary Product Disclosure Statement is in use; or

(ii) to keep a copy of a Product Disclosure Statement or a Supplementary Product Disclosure Statement for a particular period; or

(iii) to make a copy of a Product Disclosure Statement or a Supplementary Product Disclosure Statement available to ASIC; or

(iv) to comply with a request from a person for a copy of a Product Disclosure Statement or a Supplementary Product Disclosure Statement; and

(b) the person does not comply with that requirement.

1021N Offence of failing to provide additional information requested under section 1017A

A person (the responsible person) commits an offence if:

(a) a request is made to them by another person, in accordance with subsection 1017A(1), to provide further information about a financial product; and

(b) the responsible person is required by subsection 1017A(2) to give the other person the information; and

(c) the other person has paid any charge in respect of the request, being a charge that is in accordance with subsections 1017A(5) and (6); and

(d) the responsible person does not take reasonable steps to ensure that, as soon as practicable after receiving the request, and in any event within one month, the information is provided to the other person in accordance with subsection 1017A(4).

1021NA Offences relating to obligation to make product dashboard publicly available

Failure to comply with obligation to make product dashboard publicly available

(1) A person commits an offence if:

(a) the person is a trustee of a regulated superannuation fund; and

(b) as trustee, the person is required, under section 1017BA, to ensure that a product dashboard for each of the fund’s MySuper products and choice products is made publicly available on the fund’s website; and

(c) a product dashboard for each of the fund’s MySuper products and choice products is not made publicly available as required by that section.

Offence where information known to be defective

(2) A person commits an offence if:

(a) the person is a trustee of a regulated superannuation fund; and

(b) a product dashboard is made publicly available on the fund’s website in purported compliance with section 1017BA; and

(i) the information set out in the product dashboard has not been updated as required by that section; or

(ii) the information set out in the product dashboard is otherwise misleading or deceptive; or

(iii) there is an omission from the information set out in the product dashboard.

Offence whether or not information known to be defective

(3) A person commits an offence if:

(a) the person is a trustee of a regulated superannuation fund; and

(b) a product dashboard is made publicly available on the fund’s website in purported compliance with section 1017BA; and

(i) the information set out in the product dashboard has not been updated as required by that section; or

(ii) the information set out in the product dashboard is otherwise misleading or deceptive; or

(iii) there is an omission from the information set out in the product dashboard.

(4) For the purposes of an offence based on subsection (3), strict liability applies to the physical element of the offence specified in any of subparagraphs (3)(c)(i) to (iii).

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

Defences

(5) In any proceedings against a trustee of a regulated superannuation fund for an offence based on subparagraph (2)(c)(iii) or (3)(c)(iii), it is a defence if:

(a) the trustee or another trustee of the fund took reasonable steps to ensure that there would not be an omission from the information set out in the product dashboard; or

(b) both of the following apply:

(i) the information was omitted because it was not up to date;

(ii) the trustee or another trustee of the fund took reasonable steps to obtain up‑to‑date information; or

(i) the information was omitted because it would have been misleading or deceptive;

(ii) the trustee or another trustee of the fund took reasonable steps to obtain information that would not have been misleading or deceptive.

Note: A defendant bears an evidential burden in relation to the matters in subsection (5). See subsection 13.3(3) of the Criminal Code.

(6) In any proceedings against a trustee of a regulated superannuation fund for an offence based on subparagraph (3)(c)(i), it is a defence if the trustee or another trustee of the fund took reasonable steps to ensure that the information set out in the product dashboard was updated as required by section 1017BA.

Note: A defendant bears an evidential burden in relation to the matters in subsection (6). See subsection 13.3(3) of the Criminal Code.

(7) In any proceedings against a trustee of a regulated superannuation fund for an offence based on subparagraph (3)(c)(ii), it is a defence if the trustee or another trustee of the fund took reasonable steps to ensure that the information set out in the product dashboard would not be misleading or deceptive.

Note: A defendant bears an evidential burden in relation to the matters in subsection (7). See subsection 13.3(3) of the Criminal Code.

1021NB Offences relating to obligation to make superannuation investment information publicly available

Failure to comply with obligation to make information publicly available

(1) A person commits an offence if:

(a) the person is a trustee of a registrable superannuation entity; and

(b) as trustee, the person is required, under section 1017BB, to make information publicly available on the entity’s website; and

Offence where information known to be defective

(2) A person commits an offence if:

(a) the person is a trustee of a registrable superannuation entity; and

(b) as trustee, the person is required, under section 1017BB, to make information publicly available; and

(d) the trustee knows that:

(i) the information is misleading or deceptive; or

(ii) there is an omission from the information.

Offence whether or not information known to be defective

(3) A person commits an offence if:

(a) the person is a trustee of a registrable superannuation entity; and

(b) as trustee, the person is required, under section 1017BB, to make information publicly available; and

(d) either:

(i) the information is misleading or deceptive; or

(ii) there is an omission from the information.

(4) For the purposes of an offence based on subsection (3), strict liability applies to the physical element of the offence specified in subparagraph (3)(d)(i) or (ii).

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

Defences

(5) In any proceedings against a trustee of a registrable superannuation entity for an offence based on subsection (1), it is a defence if the information would have been made publicly available but for the fact that the trustee or another trustee of the entity was unable to obtain the information after taking reasonable steps to do so.

Note: A defendant bears an evidential burden in relation to the matters in subsection (5). See subsection 13.3(3) of the Criminal Code.

(6) In any proceedings against a trustee of a registrable superannuation entity for an offence based on subparagraph (2)(d)(ii) or (3)(d)(ii), it is a defence if:

(a) there was an omission from the information made publicly available because the trustee or another trustee of the entity was unable to obtain the information after taking reasonable steps to do so; or

(b) both of the following apply:

(i) the information was omitted because it would have been misleading or deceptive;

(ii) the trustee or another trustee of the entity took reasonable steps to obtain information that would not have been misleading or deceptive.

Note: A defendant bears an evidential burden in relation to the matters in subsection (6). See subsection 13.3(3) of the Criminal Code.

(7) In any proceedings against a trustee of a registrable superannuation entity for an offence based on subparagraph (3)(d)(i), it is a defence if the trustee or another trustee of the entity took reasonable steps to ensure that the information made publicly available would not be misleading or deceptive.

Note: A defendant bears an evidential burden in relation to the matters in subsection (7). See subsection 13.3(3) of the Criminal Code.

1021NC Offences relating to obligations under sections 1017BC, 1017BD and 1017BE

Failure to notify

(1) A person commits an offence if:

(a) the person is required to notify another person under subsection 1017BC(2) or (4) or section 1017BD or 1017BE; and

(b) the person does not notify, and is not taken to have notified, the other person as required by that provision.

Failure to provide information

(2) A person commits an offence if:

(a) the person is required to provide another person with information under subsection 1017BC(3); and

(b) the person does not provide the other person with the information as required by that subsection.

Information provided known to be defective

(3) A person commits an offence if:

(a) the person:

(i) notifies another person of information as required by subsection 1017BC(2) or (4) or section 1017BD or 1017BE; or

(ii) provides information (whether in a document or otherwise) to another person as required by subsection 1017BC(3); and

(b) the person knows that:

(i) the information provided is misleading or deceptive; or

(ii) there is an omission from the information provided.

Information provided defective

(4) A person commits an offence if:

(a) the person:

(i) notifies another person of information as required by subsection 1017BC(2) or (4) or section 1017BD or 1017BE; or

(ii) provides information (whether in a document or otherwise) to another person as required by subsection 1017BC(3); and

(b) either:

(i) the information provided is misleading or deceptive; or

(ii) there is an omission from the information provided.

(5) For the purposes of an offence based on subsection (4), strict liability applies to the physical element of the offence specified in subparagraph (4)(b)(i) or (ii).

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

Defences

(6) In any proceedings against a person for an offence based on subparagraph (3)(b)(ii) or (4)(b)(ii), it is a defence if:

(a) the person took reasonable steps to ensure that there would not be an omission from the information provided; or

(b) both of the following apply:

(i) the information was omitted because it would have been misleading or deceptive;

(ii) the person took reasonable steps to obtain information that would not have been misleading or deceptive.

Note: A defendant bears an evidential burden in relation to the matters in subsection (6). See subsection 13.3(3) of the Criminal Code.

(7) In any proceedings against a person for an offence based on subparagraph (4)(b)(i), it is a defence if the person took reasonable steps to ensure that the information provided would not be misleading or deceptive.

Note: A defendant bears an evidential burden in relation to the matters in subsection (7). See subsection 13.3(3) of the Criminal Code.

1021O Offences of issuer or seller of financial product failing to pay money into an account as required

Strict liability offence

(1) An issuer or seller of financial products commits an offence if:

(a) the issuer or seller is required by subsection 1017E(2) to pay particular money into an account in accordance with that subsection; and

(b) the issuer or seller does not pay the money into an account in accordance with that subsection.

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

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

Ordinary offence

(3) An issuer or seller of financial products commits an offence if:

(a) the issuer or seller is required by subsection 1017E(2) to pay particular money into an account in accordance with that subsection; and

(b) the issuer or seller does not pay the money into an account in accordance with that subsection.

1021P Offences relating to offers to which Division 5A applies

Failure to comply with requirements of section 1019E relating to how offers are made

(1) A person commits an offence if:

(a) the person makes an offer; and

(b) the offer is an offer to which Division 5A applies (see section 1019D); and

Contravening section 1019F by inviting offers to sell

(2) A person commits an offence if:

(a) the person invites another person to make an offer to sell a financial product; and

(b) in making the invitation, the person contravenes section 1019F.

Failure to comply with requirements of section 1019G relating to duration and withdrawal of offers

(3) A person commits an offence if:

(a) the person makes an offer; and

(b) the offer is an offer to which Division 5A applies (see section 1019D); and

(i) the offer does not remain open for the period required by paragraph 1019G(1)(a);

(ii) the offer remains open for longer than is permitted by paragraph 1019G(1)(b);

(iii) in purporting to withdraw the offer, the person fails to comply with a requirement of subsection 1019G(2) or (3).

Failure to comply with requirements of section 1019I relating to price or value

(4) A person commits an offence if:

(a) the person makes an offer; and

(b) the offer is an offer to which Division 5A applies (see section 1019D); and

(d) either:

(i) the offer document does not comply with paragraph 1019I(2)(a), (b) or (c); or

(ii) material of a kind referred to in paragraph 1019I(2)(a), (b) or (c) that is included in the offer document is misleading or deceptive.

Failure to comply with other requirements of section 1019I

(5) A person commits an offence if:

(a) the person makes an offer; and

(b) the offer is an offer to which Division 5A applies (see section 1019D); and

(d) either:

(i) the offer document does not comply with subsection 1019I(1), or paragraph 1019I(2)(d), (e) or (f); or

(ii) material of a kind referred to in subsection 1019I(1), or paragraph 1019I(2)(d), (e) or (f), that is included in the offer document is misleading or deceptive.

Failure to comply with requirements of section 1019J

(6) A person commits an offence if:

(a) the person makes an offer; and

(b) the offer is an offer to which Division 5A applies (see section 1019D); and

(c) section 1019J applies because of an increase or decrease in the market value of the financial product to which the offer relates; and

(d) one of the following subparagraphs applies:

(i) the person fails to comply with subsection 1019J(2) in relation to that increase or decrease; or

(ii) the person gives the offeree a supplementary offer document in relation to that increase or decrease, but that document does not comply with subsection 1019J(3); or

(iii) the person gives the offeree a supplementary offer document in relation to that increase or decrease, but material of a kind referred to in subsection 1019J(3) that is included in that document is misleading or deceptive.

Subdivision B—Civil liability

1022A Definitions

(1) In this Subdivision:

defective, in relation to a disclosure document or statement, means:

(a) there is a misleading or deceptive statement in the disclosure document or statement; or

(d) if it is information required by paragraph 1012G(3)(a)—there is an omission from the information of material required by that paragraph; or

(e) if it is an offer document of a kind referred to in section 1019E—there is an omission from the document of material required by section 1019I; or

(f) if it is a supplementary offer document of a kind referred to in section 1019J—there is an omission from the document of material required by subsection 1019J(3).

disclosure document or statement means:

(a) a Product Disclosure Statement; or

(b) a Supplementary Product Disclosure Statement; or

(d) an offer document of a kind referred to in section 1019E; or

(e) a supplementary offer document of a kind referred to in section 1019J.

regulated person has the same meaning as it has in Division 2.

Note: The effect of section 1014D (information in a Supplementary Product Disclosure Statement is taken to be contained in the Product Disclosure Statement it supplements) must be taken into account in determining whether section 1012J is complied with in relation to a Product Disclosure Statement.

1022B Civil action for loss or damage

(1) This section applies in the following situations:

(a) a person:

(i) is required by a provision of this Part to give another person (the client) a Product Disclosure Statement or a Supplementary Product Disclosure Statement (the required disclosure document or statement); and

(ii) does not give (in accordance with section 1015C) the client anything purporting to be the required disclosure document or statement by the time they are required to do so; or

(aa) a person makes an offer to which Division 5A applies (see section 1019D) to another person (the client) otherwise than by sending the client an offer document in accordance with section 1019E; or

(ab) a person makes an invitation prohibited by section 1019F to another person (the client); or

(ac) a person:

(i) is required by subsection 1019J(2), in relation to an offer made to another person (the client), to send the client a withdrawal document or a supplementary offer document; and

(ii) does not send (in accordance with paragraphs 1019E(1)(a) and (b)) the client anything purporting to be either of those things by the time they are required to do so; or

(b) a person:

(i) is required by paragraph 1012G(3)(a) to orally communicate information (the required disclosure document or statement) to another person (the client); and

(ii) does not orally communicate to the other person anything purporting to be the information required by that paragraph by the time they are required to do so; or

(i) gives another person (the client) a disclosure document or statement (other than an offer document of a kind referred to in section 1019E or a supplementary offer document of a kind referred to in section 1019J) that is defective in circumstances in which a disclosure document or statement is required by a provision of this Part to be given to the client; or

(ia) makes an offer to which Division 5A applies (see section 1019D) by sending another person (the client) an offer document in accordance with section 1019E, but that offer document is defective; or

(ib) in a situation to which section 1019J applies, sends a person (the client) a supplementary offer document in accordance with that section but that supplementary offer document is defective; or

(ii) is a regulated person and gives, or makes available to, another person (the client) a disclosure document or statement, being a Product Disclosure Statement or a Supplementary Product Disclosure Statement, that is defective, reckless as to whether the client will or may rely on the information in it; or

(d) a person:

(i) gives consent to the inclusion of a statement in a Product Disclosure Statement or a Supplementary Product Disclosure Statement as mentioned in subsection 1021L(1), disregarding paragraph 1021L(1)(c); or

(ii) does not take reasonable steps to withdraw such a statement as mentioned in subsection 1021L(2), disregarding subparagraphs 1021L(2)(b)(iii) and (iv); or

(e) a person contravenes section 1017B or 1017D; or

(f) a person is required by section 1017BA to make information publicly available on a regulated superannuation fund’s website and any of the following circumstances apply:

(i) the information is not made publicly available as required by that section;

(ii) the information made publicly available is not updated as required by that section;

(iii) the information made publicly available is misleading or deceptive;

(iv) there is an omission from the information made publicly available; or

(g) a person is required by section 1017BB to make information publicly available on a registrable superannuation entity’s website and any of the following circumstances apply:

(i) the information is not made publicly available as required by that section;

(ii) the information made publicly available is misleading or deceptive;

(iii) there is an omission from the information made publicly available; or

(h) a person is required by subsection 1017BC(3) to provide information to another person and any of the following circumstances apply:

(i) the person does not provide the information as required by that subsection;

(ii) the information provided is misleading or deceptive;

(iii) there is an omission from the information provided.

In paragraph (c), give means give by any means (including orally), and is not limited to giving in accordance with section 1015C or paragraph 1012G(3)(a).

(2) In a situation to which this section applies, if a person suffers loss or damage:

(a) if paragraph (1)(a) applies—because the client was not given the disclosure document or statement that they should have been given; or

(aa) if paragraph (1)(aa) applies—because the client was not sent an offer document in accordance with section 1019E; or

(ab) if paragraph (1)(ab) applies—because the client received an invitation prohibited by section 1019F rather than being sent an offer document in accordance with section 1019E; or

(ac) if paragraph (1)(ac) applies—because the client was not sent a withdrawal document or a supplementary offer document as required by subsection 1019J(2); or

(b) if paragraph (1)(b) applies—because the information required by paragraph 1012G(3)(a) was not communicated to the client; or

(c) if paragraph (1)(c) applies—because the disclosure document or statement the client was given or sent was defective; or

(d) if paragraph (1)(d) applies—because the consent referred to in that paragraph was given, or was not withdrawn, as the case requires; or

(e) if paragraph (1)(e) applies—because of the contravention referred to in that paragraph; or

(f) if paragraph (1)(f), (g) or (h) apply—because of any of the circumstances mentioned in those paragraphs;

the person may recover the amount of the loss or damage by action against the, or a, liable person (see subsections (3) to (5)), whether or not that person (or anyone else) has been convicted of an offence in respect of the matter referred to in paragraph (a), (aa), (ab), (ac), (b), (c), (d), (e) or (f).

(3) For the purposes of subsection (2), the, or a, liable person is:

(a) if paragraph (1)(a), (aa), (ab), (ac) or (b) applies—subject to subsection (4), the person first‑referred to in that paragraph; or

(aa) if paragraph (1)(c) applies and the disclosure document or statement is information required by paragraph 1012G(3)(a)—subject to subsection (5A), the person first‑referred to in paragraph (1)(c) of this section; or

(b) if paragraph (1)(c) (other than subparagraph (1)(c)(ia) or (ib)) applies and the disclosure document or statement is not information required by paragraph 1012G(3)(a)—subject to subsection (5):

(i) the person by whom, or on whose behalf, the disclosure document or statement was prepared; and

(ii) each other person involved in the preparation of the disclosure document or statement who, directly or indirectly, caused the disclosure document or statement to be defective or contributed to it being defective; or

(ba) if subparagraph (1)(c)(ia) or (ib) applies—the person who made the offer; or

(d) if paragraph (1)(e) applies—the person who contravened the provision concerned; or

(e) if paragraph (1)(f) applies—the trustee, or the trustees, of the regulated superannuation fund on whose website the information was required to be made publicly available; or

(f) if paragraph (1)(g) applies—the trustee, or the trustees, of the registrable superannuation entity on whose website the information was required to be made publicly available; or

(g) if paragraph (1)(h) applies—the person who was required to provide the information.

(4) If paragraph (1)(a) or (b) applies, or paragraph (1)(c) applies so far as it relates to information required by paragraph 1012G(3)(a), and the person who would, but for this subsection, be the liable person is an authorised representative, the authorised representative is not the liable person and the following paragraphs apply:

(a) if the authorised representative is an authorised representative of only one financial services licensee—that financial services licensee is the liable person;

(b) if the authorised representative is an authorised representative of more than one financial services licensee:

(i) if, under the rules in section 917C, one of those licensees is responsible for the person’s conduct—that licensee is the (or a) liable person; or

(ii) if, under the rules in section 917C, 2 or more of those licensees are jointly and severally responsible for the person’s conduct—each of those licensees is a liable person.

(4A) For the purposes of paragraph (4)(b):

(a) section 917C is taken to apply, despite section 917F; and

(b) section 917D is taken not to apply.

(5) If:

(a) paragraph (1)(c) (other than subparagraph (1)(c)(ia) or (ib)) applies; and

(b) an alteration was made to the disclosure document or statement (not being information required by paragraph 1012G(3)(a)) before it was given to the client; and

(c) the alteration made the disclosure document or statement defective, or more defective than it would otherwise have been; and

(d) the alteration was not made by, or with the authority of, the person who would, but for this subsection, be a liable person because of subparagraph (3)(b)(i);

then, so far as a person has suffered loss or damage because the disclosure document or statement was defective because of the alteration, the person who made the alteration is a liable person, rather than the person referred to in paragraph (d).

(5A) If:

(a) paragraph (3)(aa) applies; and

(b) the person referred to in that paragraph is not the issuer, or an authorised representative of the issuer, of the financial product to which the required disclosure document or statement relates; and

(c) the required disclosure document or statement was defective because of information, or an omission from information, provided to that person (whether in a document or otherwise) by the issuer of the product;

the issuer of the product is the liable person, rather than the person who would otherwise be the liable person because of paragraph (3)(aa) or subsection (4).

(6) An action under subsection (2) may be begun at any time within 6 years after the day on which the cause of action arose.

(7) A person is not liable under subsection (2) in a situation described in paragraph (1)(c) if the person took reasonable steps to ensure that the disclosure document or statement would not be defective.

(7A) If subsection (5A) applies, the issuer of the financial product is not liable under subsection (2) if the issuer took reasonable steps to ensure that the information provided as mentioned in paragraph (5A)(c) would not be such as to make the required disclosure document or statement defective.

(7B) A person is not liable under subsection (2) in a situation described in subparagraph (1)(f)(iii), (g)(ii) or (h)(ii) if the person took reasonable steps to ensure that the information would not be misleading or deceptive.

(7C) A person is not liable under subsection (2) in a situation described in subparagraph (1)(f)(iv), (g)(iii) or (h)(iii) if the person took reasonable steps to ensure that there would not be an omission from the information.

(8) This section does not affect any liability that a person has under any other law.

1022C Additional powers of court to make orders

(1) The court dealing with an action under subsection 1022B(2) may, in addition to awarding loss or damage under that subsection and if it thinks it necessary in order to do justice between the parties:

(a) make an order declaring void a contract entered into by the client referred to in that subsection for or relating to a financial product or a financial service; and

(b) if it makes an order under paragraph (a)—make such other order or orders as it thinks are necessary or desirable because of that order.

(2) Without limiting paragraph (1)(b), the orders that may be made under that paragraph include (but are not limited to) an order for the return of money paid by a person, and/or an order for payment of an amount of interest specified in, or calculated in accordance with, the order.

Part 7.10—Market misconduct and other prohibited conduct relating to financial products and financial services

Division 1—Preliminary

1040A Content of Part

This Part deals in Division 2 with various kinds of prohibited conduct, other than insider trading. The insider trading prohibitions are contained in Division 3.

1040B Treat certain instruments as if they were financial products and Division 3 financial products

(1) This Part applies to bank accepted bills, and to negotiable certificates of deposit, as if they were:

(a) financial products; and

(b) Division 3 financial products (within the meaning of Division 3).

(2) If a term used in this Part is defined outside of this Part by reference to financial products, treat that term when used in this Part as if that reference to financial products included a reference to each of the following:

(a) bank accepted bills;

(b) negotiable certificates of deposit.

(3) Subsections (1) and (2) do not, by implication, affect the interpretation of any other provision:

(a) of this Act; or

(b) of an instrument made under this Act.

Division 2—The prohibited conduct (other than insider trading prohibitions)

1041A Market manipulation

A person must not take part in, or carry out (whether directly or indirectly and whether in this jurisdiction or elsewhere):

(a) a transaction that has or is likely to have; or

(b) 2 or more transactions that have or are likely to have;

the effect of:

(c) creating an artificial price for trading in financial products on a financial market operated in this jurisdiction; or

(d) maintaining at a level that is artificial (whether or not it was previously artificial) a price for trading in financial products on a financial market operated in this jurisdiction.

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

Note 2: This section is also a civil penalty provision (see section 1317E). For relief from liability to a civil penalty relating to this section, see section 1317S.

1041B False trading and market rigging—creating a false or misleading appearance of active trading etc.

(1) A person must not do, or omit to do, an act (whether in this jurisdiction or elsewhere) if that act or omission has or is likely to have the effect of creating, or causing the creation of, a false or misleading appearance:

(a) of active trading in financial products on a financial market operated in this jurisdiction; or

(b) with respect to the market for, or the price for trading in, financial products on a financial market operated in this jurisdiction.

Note 1: Failure to comply with this subsection is an offence (see subsection 1311(1)). For defences to a prosecution based on this subsection, see Division 4.

Note 2: This subsection is also a civil penalty provision (see section 1317E). For relief from liability to a civil penalty relating to this subsection, see Division 4 and section 1317S.

(1A) For the purposes of the application of the Criminal Code in relation to an offence based on subsection (1):

(a) intention is the fault element for the physical element consisting of doing or omitting to do an act as mentioned in that subsection; and

(b) recklessness is the fault element for the physical element consisting of having, or being likely to have, the effect of creating, or causing the creation of, a false or misleading appearance as mentioned in that subsection.

Note 1: For intention, see section 5.2 of the Criminal Code.

Note 2: For recklessness, see section 5.4 of the Criminal Code.

(2) For the purposes of subsection (1), a person is taken to have created a false or misleading appearance of active trading in particular financial products on a financial market if the person:

(a) enters into, or carries out, either directly or indirectly, any transaction of acquisition or disposal of any of those financial products that does not involve any change in the beneficial ownership of the products; or

(b) makes an offer (the regulated offer) to acquire or to dispose of any of those financial products in the following circumstances:

(i) the offer is to acquire or to dispose of at a specified price; and

(ii) the person has made or proposes to make, or knows that an associate of the person has made or proposes to make:

(A) if the regulated offer is an offer to acquire—an offer to dispose of; or

(B) if the regulated offer is an offer to dispose of—an offer to acquire;

the same number, or substantially the same number, of those financial products at a price that is substantially the same as the price referred to in subparagraph (i).

Note: The circumstances in which a person creates a false or misleading appearance of active trading in particular financial products on a financial market are not limited to the circumstances set out in this subsection.

(3) For the purposes of paragraph (2)(a), an acquisition or disposal of financial products does not involve a change in the beneficial ownership if:

(a) a person who had an interest in the financial products before the acquisition or disposal; or

(b) an associate of such a person;

has an interest in the financial products after the acquisition or disposal.

(4) The reference in paragraph (2)(a) to a transaction of acquisition or disposal of financial products includes:

(a) a reference to the making of an offer to acquire or dispose of financial products; and

(b) a reference to the making of an invitation, however expressed, that expressly or impliedly invites a person to offer to acquire or dispose of financial products.

1041C False trading and market rigging—artificially maintaining etc. trading price

(1) A person must not (whether in this jurisdiction or elsewhere) enter into, or engage in, a fictitious or artificial transaction or device if that transaction or device results in:

(a) the price for trading in financial products on a financial market operated in this jurisdiction being maintained, inflated or depressed; or

(b) fluctuations in the price for trading in financial products on a financial market operated in this jurisdiction.

Note 1: Failure to comply with this subsection is an offence (see subsection 1311(1)). For defences to a prosecution based on this subsection, see Division 4.

Note 2: This subsection is also a civil penalty provision (see section 1317E). For relief from liability to a civil penalty relating to this subsection, see Division 4 and section 1317S.

(2) In determining whether a transaction is fictitious or artificial for the purposes of subsection (1), the fact that the transaction is, or was at any time, intended by the parties who entered into it to have effect according to its terms is not conclusive.

1041D Dissemination of information about illegal transactions

A person must not (whether in this jurisdiction or elsewhere) circulate or disseminate, or be involved in the circulation or dissemination of, any statement or information to the effect that the price for trading in financial products on a financial market operated in this jurisdiction will, or is likely to, rise or fall, or be maintained, because of a transaction, or other act or thing done, in relation to those financial products, if:

(a) the transaction, or thing done, constitutes or would constitute a contravention of section 1041A, 1041B, 1041C, 1041E or 1041F; and

(b) the person, or an associate of the person:

(i) has entered into such a transaction or done such an act or thing; or

(ii) has received, or may receive, directly or indirectly, a consideration or benefit for circulating or disseminating, or authorising the circulation or dissemination of, the statement or information.

Note 1: Failure to comply with this section is an offence (see subsection 1311(1)). For defences to a prosecution based on this section, see Division 4.

Note 2: This section is also a civil penalty provision (see section 1317E). For relief from liability to a civil penalty relating to this section, see Division 4 and section 1317S.

1041E False or misleading statements

(1) A person must not (whether in this jurisdiction or elsewhere) make a statement, or disseminate information, if:

(a) the statement or information is false in a material particular or is materially misleading; and

(b) the statement or information is likely:

(i) to induce persons in this jurisdiction to apply for financial products; or

(ii) to induce persons in this jurisdiction to dispose of or acquire financial products; or

(iii) to have the effect of increasing, reducing, maintaining or stabilising the price for trading in financial products on a financial market operated in this jurisdiction; and

(i) the person does not care whether the statement or information is true or false; or

(ii) the person knows, or ought reasonably to have known, that the statement or information is false in a material particular or is materially misleading.

Note 1: Failure to comply with this subsection is an offence (see subsection 1311(1)). For defences to a prosecution based on this subsection, see Division 4.

Note 2: Failure to comply with this subsection may also lead to civil liability under section 1041I. For relief from liability under that section, see Division 4.

(2) For the purposes of the application of the Criminal Code in relation to an offence based on subsection (1), paragraph (1)(a) is a physical element, the fault element for which is as specified in paragraph (1)(c).

(3) For the purposes of an offence based on subsection (1), strict liability applies to subparagraphs (1)(b)(i), (ii) and (iii).

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

1041F Inducing persons to deal

(1) A person must not, in this jurisdiction, induce another person to deal in financial products:

(a) by making or publishing a statement, promise or forecast if the person knows, or is reckless as to whether, the statement is misleading, false or deceptive; or

(b) by a dishonest concealment of material facts; or

(c) by recording or storing information that the person knows to be false or misleading in a material particular or materially misleading if:

(i) the information is recorded or stored in, or by means of, a mechanical, electronic or other device; and

(ii) when the information was so recorded or stored, the person had reasonable grounds for expecting that it would be available to the other person, or a class of persons that includes the other person.

Note 1: Failure to comply with this subsection is an offence (see subsection 1311(1)). For defences to a prosecution based on this subsection, see Division 4.

Note 2: Failure to comply with this subsection may also lead to civil liability under section 1041I. For relief from liability under that section, see Division 4.

(2) In this section:

dishonest means:

(a) dishonest according to the standards of ordinary people; and

(b) known by the person to be dishonest according to the standards of ordinary people.

(3) This section applies in relation to the following conduct as if that conduct were dealing in financial products:

(a) applying to become a standard employer‑sponsor (within the meaning of the Superannuation Industry (Supervision) Act 1993) of a superannuation entity (within the meaning of that Act);

(b) permitting a person to become a standard employer‑sponsor (within the meaning of the Superannuation Industry (Supervision) Act 1993) of a superannuation entity (within the meaning of that Act);

(c) applying, on behalf of an employee (within the meaning of the Retirement Savings Accounts Act 1997), for the employee to become the holder of an RSA product.

1041G Dishonest conduct

(1) A person must not, in the course of carrying on a financial services business in this jurisdiction, engage in dishonest conduct in relation to a financial product or financial service.

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

Note 2: Failure to comply with this subsection may also lead to civil liability under section 1041I.

(2) In this section:

dishonest means:

(a) dishonest according to the standards of ordinary people; and

(b) known by the person to be dishonest according to the standards of ordinary people.

1041H Misleading or deceptive conduct (civil liability only)

(1) A person must not, in this jurisdiction, engage in conduct, in relation to a financial product or a financial service, that is misleading or deceptive or is likely to mislead or deceive.

Note 1: Failure to comply with this subsection is not an offence.

Note 2: Failure to comply with this subsection may lead to civil liability under section 1041I. For limits on, and relief from, liability under that section, see Division 4.

(2) The reference in subsection (1) to engaging in conduct in relation to a financial product includes (but is not limited to) any of the following:

(a) dealing in a financial product;

(b) without limiting paragraph (a):

(i) issuing a financial product;

(ii) publishing a notice in relation to a financial product;

(iii) making, or making an evaluation of, an offer under a takeover bid or a recommendation relating to such an offer;

(iv) applying to become a standard employer‑sponsor (within the meaning of the Superannuation Industry (Supervision) Act 1993) of a superannuation entity (within the meaning of that Act);

(v) permitting a person to become a standard employer‑sponsor (within the meaning of the Superannuation Industry (Supervision) Act 1993) of a superannuation entity (within the meaning of that Act);

(vi) a trustee of a superannuation entity (within the meaning of the Superannuation Industry (Supervision) Act 1993) dealing with a beneficiary of that entity as such a beneficiary;

(vii) a trustee of a superannuation entity (within the meaning of the Superannuation Industry (Supervision) Act 1993) dealing with an employer‑sponsor (within the meaning of that Act), or an associate (within the meaning of that Act) of an employer‑sponsor, of that entity as such an employer‑sponsor or associate;

(viii) applying, on behalf of an employee (within the meaning of the Retirement Savings Accounts Act 1997), for the employee to become the holder of an RSA product;

(ix) an RSA provider (within the meaning of the Retirement Savings Accounts Act 1997) dealing with an employer (within the meaning of that Act), or an associate (within the meaning of that Act) of an employer, who makes an application, on behalf of an employee (within the meaning of that Act) of the employer, for the employee to become the holder of an RSA product, as such an employer;

(x) carrying on negotiations, or making arrangements, or doing any other act, preparatory to, or in any way related to, an activity covered by any of subparagraphs (i) to (ix).

(3) Conduct:

(a) that contravenes:

(i) section 670A (misleading or deceptive takeover document); or

(ii) section 728 (misleading or deceptive fundraising document); or

(iia) section 738Y (other liabilities relating to defective CSF offer documents); or

(iii) section 1021NA, 1021NB or 1021NC; or

(b) in relation to a disclosure document or statement within the meaning of section 953A; or

does not contravene subsection (1). For this purpose, conduct contravenes the provision even if the conduct does not constitute an offence, or does not lead to any liability, because of the availability of a defence.

1041I Civil action for loss or damage for contravention of sections 1041E to 1041H

(1) A person who suffers loss or damage by conduct of another person that was engaged in in contravention of section 1041E, 1041F, 1041G or 1041H may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention, whether or not that other person or any person involved in the contravention has been convicted of an offence in respect of the contravention.

(1A) Subsection (1) has effect subject to section 1044B.

Note: Section 1044B may limit the amount that the person may recover for a contravention of section 1041H (Misleading or deceptive conduct) from the other person or from another person involved in the contravention.

(1B) Despite subsection (1), if:

(a) a person (the claimant) makes a claim under subsection (1) in relation to:

(i) economic loss; or

(ii) damage to property;

caused by conduct of another person (the defendant) that was done in contravention of section 1041H; and

(b) the claimant suffered the loss or damage:

(i) as a result partly of the claimant’s failure to take reasonable care; and

(ii) as a result partly of the conduct referred to in paragraph (a); and

(i) did not intend to cause the loss or damage; and

(ii) did not fraudulently cause the loss or damage;

the damages that the claimant may recover in relation to the loss or damage are to be reduced to the extent to which the court thinks just and equitable having regard to the claimant’s share in the responsibility for the loss or damage.

Note: Division 2A also applies proportionate liability to a claim for damages under this section for a contravention of section 1041H.

(2) An action under subsection (1) may be begun at any time within 6 years after the day on which the cause of action arose.

(3) This section does not affect any liability that a person has under any other law.

(4) Section 1317S (which provides for relief from liability) applies in relation to liability under subsection (1) as if:

(a) the sections referred to in subsection (1) were civil penalty provisions; and

(b) proceedings under subsection (1) were eligible proceedings.

Note: Relief from liability under this section may also be available (depending on the circumstances) under Division 4.

1041J Sections of this Division have effect independently of each other

Subject to any express provision to the contrary, the various sections in this Division have effect independently of each other, and nothing in any of the sections limits the scope or application of any of the other sections.

1041K Division applies to certain conduct to the exclusion of State Fair Trading Acts provisions

(1) This section applies to conduct:

(a) that contravenes:

(i) section 670A (misleading or deceptive takeover document); or

(ii) section 728 (misleading or deceptive fundraising document); or

(iia) section 738Y (other liabilities relating to defective CSF offer documents); or

(iii) section 1021NA, 1021NB or 1021NC; or

(b) that relates to a disclosure document or statement within the meaning of section 953A; or

For this purpose, conduct contravenes the provision even if the conduct does not constitute an offence, or does not lead to any liability, because of the availability of a defence.

(2) This Division operates in relation to conduct to which this section applies to the exclusion of the provisions of the State Fair Trading Act of any State or Territory.

Division 2A—Proportionate liability for misleading and deceptive conduct

1041L Application of Division

(1) This Division applies to a claim (an apportionable claim) if the claim is a claim for damages made under section 1041I for:

(a) economic loss; or

(b) damage to property;

caused by conduct that was done in a contravention of section 1041H.

(2) For the purposes of this Division, there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action (whether or not of the same or a different kind).

(3) In this Division, a concurrent wrongdoer, in relation to a claim, is a person who is one of 2 or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim.

(4) For the purposes of this Division, apportionable claims are limited to those claims specified in subsection (1).

(5) For the purposes of this Division, it does not matter that a concurrent wrongdoer is insolvent, is being wound up or has ceased to exist or died.

1041M Certain concurrent wrongdoers not to have benefit of apportionment

(1) Nothing in this Division operates to exclude the liability of a concurrent wrongdoer (an excluded concurrent wrongdoer) in proceedings involving an apportionable claim if:

(a) the concurrent wrongdoer intended to cause the economic loss or damage to property that is the subject of the claim; or

(b) the concurrent wrongdoer fraudulently caused the economic loss or damage to property that is the subject of the claim.

(2) The liability of an excluded concurrent wrongdoer is to be determined in accordance with the legal rules (if any) that (apart from this Division) are relevant.

(3) The liability of any other concurrent wrongdoer who is not an excluded concurrent wrongdoer is to be determined in accordance with the provisions of this Division.

1041N Proportionate liability for apportionable claims

(1) In any proceedings involving an apportionable claim:

(a) the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant’s responsibility for the damage or loss; and

(b) the court may give judgment against the defendant for not more than that amount.

(2) If the proceedings involve both an apportionable claim and a claim that is not an apportionable claim:

(a) liability for the apportionable claim is to be determined in accordance with the provisions of this Division; and

(b) liability for the other claim is to be determined in accordance with the legal rules, if any, that (apart from this Division) are relevant.

(3) In apportioning responsibility between defendants in the proceedings:

(a) the court is to exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent under any relevant law; and

(b) the court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings.

(4) This section applies in proceedings involving an apportionable claim whether or not all concurrent wrongdoers are parties to the proceedings.

(5) A reference in this Division to a defendant in proceedings includes any person joined as a defendant or other party in the proceedings (except as a plaintiff) whether joined under this Division, under rules of court or otherwise.

1041O Defendant to notify plaintiff of concurrent wrongdoer of whom defendant aware

(1) If:

(a) a defendant in proceedings involving an apportionable claim has reasonable grounds to believe that a particular person (the other person) may be a concurrent wrongdoer in relation to the claim; and

(b) the defendant fails to give the plaintiff, as soon as practicable, written notice of the information that the defendant has about:

(i) the identity of the other person; and

(ii) the circumstances that may make the other person a concurrent wrongdoer in relation to the claim; and

(c) the plaintiff unnecessarily incurs costs in the proceedings because the plaintiff was not aware that the other person may be a concurrent wrongdoer in relation to the claim;

the court hearing the proceedings may order that the defendant pay all or any of those costs of the plaintiff.

(2) The court may order that the costs to be paid by the defendant be assessed on an indemnity basis or otherwise.

1041P Contribution not recoverable from defendant

A defendant against whom judgment is given under this Division as a concurrent wrongdoer in relation to an apportionable claim:

(a) cannot be required to contribute to any damages or contribution recovered from another concurrent wrongdoer in respect of the apportionable claim (whether or not the damages or contribution are recovered in the same proceedings in which judgment is given against the defendant); and

(b) cannot be required to indemnify any such wrongdoer.

1041Q Subsequent actions

(1) In relation to an apportionable claim, nothing in this Division or any other law prevents a plaintiff who has previously recovered judgment against a concurrent wrongdoer for an apportionable part of any damage or loss from bringing another action against any other concurrent wrongdoer for that damage or loss.

(2) However, in any proceedings in respect of any such action, the plaintiff cannot recover an amount of damages that, having regard to any damages previously recovered by the plaintiff in respect of the damage or loss, would result in the plaintiff receiving compensation for damage or loss that is greater than the damage or loss actually sustained by the plaintiff.

1041R Joining non‑party concurrent wrongdoer in the action

(1) The court may give leave for any one or more persons to be joined as defendants in proceedings involving an apportionable claim.

(2) The court is not to give leave for the joinder of any person who was a party to any previously concluded proceedings in respect of the apportionable claim.

1041S Application of Division

Nothing in this Division:

(a) prevents a person being held vicariously liable for a proportion of an apportionable claim for which another person is liable; or

(b) prevents a partner from being held severally liable with another partner for that proportion of an apportionable claim for which the other partner is liable; or

(c) affects the operation of any other Act to the extent that it imposes several liability on any person in respect of what would otherwise be an apportionable claim.

Division 3—The insider trading prohibitions

Subdivision A—Preliminary

1042A Definitions

In this Division:

able to be traded has a meaning affected by section 1042E.

Division 3 financial products means:

(a) securities; or

(b) derivatives; or

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

(d) superannuation products, other than those prescribed by regulations made for the purposes of this paragraph; or

(e) any other financial products that are able to be traded on a financial market.

generally available, in relation to information, has the meaning given by section 1042C.

information includes:

(a) matters of supposition and other matters that are insufficiently definite to warrant being made known to the public; and

(b) matters relating to the intentions, or likely intentions, of a person.

inside information means information in relation to which the following paragraphs are satisfied:

(a) the information is not generally available;

(b) if the information were generally available, a reasonable person would expect it to have a material effect on the price or value of particular Division 3 financial products.

material effect, in relation to a reasonable person’s expectations of the effect of information on the price or value of Division 3 financial products, has the meaning given by section 1042D.

procure has a meaning affected by section 1042F.

relevant Division 3 financial products, in relation to particular inside information, means the Division 3 financial products referred to in paragraph (b) of the definition of inside information.

1042B Application of Division

This Division applies to:

(a) acts and omissions within this jurisdiction in relation to Division 3 financial products (regardless of where the issuer of the products is formed, resides or located and of where the issuer carries on business); and

(b) acts and omissions outside this jurisdiction (and whether in Australia or not) in relation to Division 3 financial products issued by:

(i) a person who carries on business in this jurisdiction; or

(ii) a body corporate that is formed in this jurisdiction.

1042C When information is generally available

(1) For the purposes of this Division, information is generally available if:

(a) it consists of readily observable matter; or

(b) both of the following subparagraphs apply:

(i) it has been made known in a manner that would, or would be likely to, bring it to the attention of persons who commonly invest in Division 3 financial products of a kind whose price might be affected by the information; and

(ii) since it was made known, a reasonable period for it to be disseminated among such persons has elapsed; or

(i) information referred to in paragraph (a);

(ii) information made known as mentioned in subparagraph (b)(i).

(2) None of the paragraphs of subsection (1) limits the generality of any of the other paragraphs of that subsection.

1042D When a reasonable person would take information to have a material effect on price or value of Division 3 financial products

For the purposes of this Division, a reasonable person would be taken to expect information to have a material effect on the price or value of particular Division 3 financial products if (and only if) the information would, or would be likely to, influence persons who commonly acquire Division 3 financial products in deciding whether or not to acquire or dispose of the first‑mentioned financial products.

1042E Division 3 financial products taken to be able to be traded despite suspensions or section 794D directions

Particular Division 3 financial products that are ordinarily able to be traded on a licensed market are taken, for the purposes of this Division, to be able to be traded on that market even though trading in those products on that market is suspended by action taken by the market licensee, or is contrary to a direction given to the market licensee by ASIC under subsection 794D(2) or 798J(2).

1042F Inciting, inducing or encouraging an act or omission constitutes procuring the omission

(1) For the purposes of this Division, but without limiting the meaning that the expression procure has apart from this section, if a person incites, induces, or encourages an act or omission by another person, the first‑mentioned person is taken to procure the act or omission by the other person.

(2) Subsection (1) does not limit the application in relation to provisions in this Division of:

(a) section 6 of the Crimes Act 1914; or

(b) section 11.1, 11.2, 11.2A, 11.4 or 11.5 of the Criminal Code.

1042G Information in possession of officer of body corporate

(1) For the purposes of this Division:

(a) a body corporate is taken to possess any information which an officer of the body corporate possesses and which came into his or her possession in the course of the performance of duties as such an officer; and

(b) if an officer of a body corporate knows any matter or thing because he or she is an officer of the body corporate, it is to be presumed that the body corporate knows that matter or thing; and

(c) if an officer of a body corporate, in that capacity, is reckless as to a circumstance or result, it is to be presumed that the body corporate is reckless as to that circumstance or result; and

(d) for the purposes of paragraph 1043M(2)(b), if an officer of a body corporate ought reasonably to know any matter or thing because he or she is an officer of the body corporate, it is to be presumed that the body corporate ought reasonably to know that matter or thing.

(2) This section does not limit the application of section 769B in relation to this Division.

1042H Information in possession of partner or employee of partnership

(1) For the purposes of this Division:

(a) a member of a partnership is taken to possess any information:

(i) which another member of the partnership possesses and which came into the other member’s possession in the other member’s capacity as a member of the partnership; or

(ii) which an employee of the partnership possesses and which came into his or her possession in the course of the performance of duties as such an employee; and

(b) if a member or employee of a partnership knows any matter or thing because the member or employee is such a member or employee, it is to be presumed that every member of the partnership knows that matter or thing; and

(c) if a member or employee of a partnership, in that capacity, is reckless as to a circumstance or result, it is to be presumed that every member of the partnership is reckless as to that circumstance or result; and

(d) for the purposes of paragraph 1043M(2)(b), if a member or employee of a partnership ought reasonably to know any matter or thing because he or she is such a member or employee, it is to be presumed that every member of the partnership ought reasonably to know that matter or thing.

(2) This section does not limit the application of section 769B in relation to this Division.

Subdivision B—The prohibited conduct

1043A Prohibited conduct by person in possession of inside information

(1) Subject to this Subdivision, if:

(a) a person (the insider) possesses inside information; and

(b) the insider knows, or ought reasonably to know, that the matters specified in paragraphs (a) and (b) of the definition of inside information in section 1042A are satisfied in relation to the information;

the insider must not (whether as principal or agent):