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Corporations Amendment Regulations 2008 (No. 5)

Authoritative Version
  • - F2008L03458
  • No longer in force
SLI 2008 No. 194 Regulations as made
These Regulations amend the Corporations Regulations 2001 to further clarify the provisions relating to the form and content of the First Home Saver Account (FHSA) product disclosure statement (PDS). They also provide that the right to return a FHSA product during the cooling-off period and certain other defined situations is restricted to reflect the payment restrictions applying to FHSAs. Other amendments facilitate the transfer of funds from an inactive FHSA to a default superannuation fund, and clarify the circumstances under which the FHSA PDS must be the first document given or sent to a client.
Administered by: Treasury
Made 18 Sep 2008
Registered 19 Sep 2008
Tabled HR 23 Sep 2008
Tabled Senate 23 Sep 2008
Date of repeal 09 Aug 2013
Repealed by Treasury (Spent and Redundant Instruments) Repeal Regulation 2013

Corporations Amendment Regulations 2008 (No. 5)1

Select Legislative Instrument 2008 No. 194

I, QUENTIN BRYCE, Governor‑General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following Regulations under the Corporations Act 2001.

Dated 18 September 2008

QUENTIN BRYCE

Governor‑General

By Her Excellency’s Command

NICK SHERRY


1              Name of Regulations

                These Regulations are the Corporations Amendment Regulations 2008 (No. 5).

2              Commencement

                These Regulations commence on the day after they are registered.

3              Amendment of Corporations Regulations 2001

                Schedule 1 amends the Corporations Regulations 2001.


Schedule 1        Amendments

(regulation 3)

  

[1]           After regulation 7.8.22A

insert

7.8.22B  Return of financial product: first home saver accounts

         (1)   For paragraph 992A (4) (b) of the Act, this regulation applies in relation to an FHSA.

         (2)   If the FHSA holder has never held another FHSA, it is a requirement of the exercise of the right to return the FHSA in circumstances in which the moneys paid to acquire the FHSA are subject to payment restrictions that:

                (a)    the FHSA holder must:

                          (i)    notify the FHSA provider, in writing or electronically, that the FHSA holder wishes to exercise the right to return the FHSA; and

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

                         (iii)    give the FHSA provider a written declaration that the FHSA holder has never previously held an FHSA; or

               (b)    the FHSA holder must:

                          (i)    notify the FHSA provider, in writing or electronically, that the FHSA holder wishes to exercise the right to return the FHSA; and

                         (ii)    no later than 1 month after notifying the FHSA provider, ask the FHSA provider to pay the entire balance of the FHSA to another FHSA nominated in the request.

         (3)   If the FHSA holder has held another FHSA, it is a requirement of the exercise of the right to return the FHSA in circumstances in which the moneys paid to acquire the FHSA are subject to payment restrictions that the FHSA holder must:

                (a)    notify the FHSA provider, in writing or electronically, that the FHSA holder wishes to exercise the right to return the FHSA; and

               (b)    no later than 1 month after notifying the FHSA provider, ask the FHSA provider to pay the entire balance of the FHSA to another FHSA nominated in the request.

[2]           Part 7.9, after Division 3

insert

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

7.9.08E  Application forms

                For paragraph 1016A (2) (f) of the Act, the following situation in which a restricted issue occurs is prescribed:

                (a)    an FHSA has become inactive as described in subsection 22 (1) of the First Home Saver Accounts Act 2008;

               (b)    the FHSA provider has sought to pay the entire balance of the FHSA to the superannuation interest mentioned in subsection 22 (3) of that Act.

[3]           Regulation 7.9.10D

substitute

7.9.10D  Manner of giving Product Disclosure Statement for first home saver accounts

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

                (a)    if a Product Disclosure Statement:

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

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

                        the Statement for the FHSA product or products must be the first document about FHSA products that is given to the person or agent at that time, other than a covering letter of no more than 1 page; but

               (b)    paragraph (a) does not require the Statement for the FHSA product or products to be given to the person or agent at that time before other documents that do not relate to the FHSA product or products.

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

                (a)    if a Product Disclosure Statement:

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

                         (ii)    is given by sending it to the address or fax number of a person or the person’s agent;

                        the Statement for the FHSA product or products must be the first document about FHSA products that is given to the person or agent at that time, other than a covering letter or fax coversheet of no more than 1 page; but

               (b)    paragraph (a) does not require the Statement for the FHSA product or products to be given to the person or agent at that time before other documents that do not relate to the FHSA product or products.

[4]           Subregulation 7.9.10E (2)

omit

materially misleading

insert

misleading

[5]           After regulation 7.9.13

insert

7.9.13A  Remedies for person acquiring financial product under defective Product Disclosure Statement: first home saver accounts

         (1)   For subsection 1016F (3) of the Act, this regulation applies in relation to an FHSA.

         (2)   If the FHSA holder has never held another FHSA, to exercise a right of return for the financial product in circumstances in which the moneys paid to acquire the FHSA are subject to payment restrictions:

                (a)    the FHSA holder must:

                          (i)    notify the FHSA provider, in writing, that the FHSA holder wishes to exercise the right to return the FHSA; and

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

                         (iii)    give the FHSA provider a written declaration that the FHSA holder has never previously held an FHSA; or

               (b)    the FHSA holder must:

                          (i)    notify the FHSA provider, in writing, that the FHSA holder wishes to exercise the right to return the FHSA; and

                         (ii)    no later than 1 month after notifying the FHSA provider, ask the FHSA provider to pay the entire balance of the FHSA to another FHSA nominated in the request.

         (3)   If the FHSA holder has held another FHSA, to exercise a right of return for the financial product in circumstances in which the moneys paid to acquire the FHSA are subject to payment restrictions, the FHSA holder must:

                (a)    notify the FHSA provider, in writing, that the FHSA holder wishes to exercise the right to return the FHSA; and

               (b)    no later than 1 month after notifying the FHSA provider, ask the FHSA provider to pay the entire balance of the FHSA to another FHSA nominated in the request.

[6]           Regulation 7.9.14, heading

substitute

7.9.14     Remedies for person acquiring financial product under defective Product Disclosure Statement: superannuation and RSAs

[7]           Regulation 7.9.65, heading

substitute

7.9.65     Return of financial product: general

[8]           After regulation 7.9.65

insert

7.9.65A  Return of financial product: first home saver accounts

         (1)   For subsection 1019B (2) of the Act, this regulation applies in relation to an FHSA.

         (2)   If the FHSA holder has never held another FHSA, it is a requirement of the exercise of the right to return the FHSA in circumstances in which the moneys paid to acquire the FHSA are subject to payment restrictions that:

                (a)    the FHSA holder must:

                          (i)    notify the FHSA provider, in writing, that the FHSA holder wishes to exercise the right to return the FHSA; and

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

                         (iii)    give the FHSA provider a written declaration that the FHSA holder has never previously held an FHSA; or

               (b)    the FHSA holder must:

                          (i)    notify the FHSA provider, in writing, that the FHSA holder wishes to exercise the right to return the FHSA; and

                         (ii)    no later than 1 month after notifying the FHSA provider, ask the FHSA provider to pay the entire balance of the FHSA to another FHSA nominated in the request.

         (3)   If the FHSA holder has held another FHSA, it is a requirement of the exercise of the right to return the FHSA in circumstances in which the moneys paid to acquire the FHSA are subject to payment restrictions that the FHSA holder must:

                (a)    notify the FHSA provider, in writing, that the FHSA holder wishes to exercise the right to return the FHSA; and

               (b)    no later than 1 month after notifying the FHSA provider, ask the FHSA provider to pay the entire balance of the FHSA to another FHSA nominated in the request.

[9]           Regulation 7.9.66, heading

substitute

7.9.66     Return of financial product: superannuation and RSAs

[10]         Schedule 10B, subitem 5 (1)

omit

You can only use your savings in three ways:

insert

You can only withdraw your savings for three purposes:

[11]         Schedule 10B, subitem 5 (1)

omit

·    You put money into your account the same way as you would make deposits into a normal bank account. You can do this at any time, and for as long as you need to save.

insert

·    You put money into your [account/fund] the same way as you would [make deposits/make contributions/put money] into a normal [bank account/credit union account/building society account/other account/managed fund]. You can do this at any time, and for as long as you need to save.

[12]         Schedule 10B, subitem 6 (1)

omit

                There is a low rate of tax on the interest your savings earn

·    Any income that your investment earns will be taxed at a low rate of 15%. This tax will be deducted from your investment earnings and paid to the Tax Office.

insert

                There is a low rate of tax on [the interest your savings earn/your investment earnings]

·    Earnings on First Home Saver Accounts are taxed at 15% but this is paid to the Tax Office by the account provider.

[13]         Schedule 10B, paragraph 7 (2) (b)

substitute

               (b)    the nature of the return that the investments may generate (for example, fixed interest, variable interest, rental income or capital gains);

[14]         Schedule 10B, paragraph 8 (d)

omit

[15]         Schedule 10B, item 11

substitute

11            Contents of section 8 (How to open an account)

                Section 8 of the Product Disclosure Statement must contain:

                (a)    information about how to acquire the product; and

               (b)    information about the effect and length of the cooling‑off period; and

                (c)    a statement that money from the product can be transferred to another FHSA product.

[16]         Schedule 10B, subparagraphs 15 (2) (c) (i) and (ii)

substitute

                          (i)    the services or functions to which the costs relate; and

                         (ii)    the costs; and

[17]         Schedule 10B, subparagraph 15 (2) (f) (v)

omit

the period of time;

insert

the period of time.

[18]         Schedule 10B, paragraph 15 (2) (g)

omit

[19]         Schedule 10B, paragraph 16 (2) (c)

substitute

                (c)    management costs that are deducted directly from the account holder’s account;

[20]         Schedule 10B, subitem 16 (4), definition of ICR

substitute

ICR, for a fund, means the ratio of:

                (a)    the sum of:

                          (i)    the fund’s management costs that are not deducted directly from an account holder’s account; and

                         (ii)    any other costs listed in paragraphs (2) (a) to (f) that are not deducted directly from the account holder’s account; to

               (b)    the fund’s total average net assets.


Note

1.       All legislative instruments and compilations are registered on the Federal Register of Legislative Instruments kept under the Legislative Instruments Act 2003. See http://www.frli.gov.au.