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Corporations Regulations 2001

Authoritative Version
  • - F2016C00736
  • In force - Superseded Version
  • View Series
SR 2001 No. 193 Regulations as amended, taking into account amendments up to Tax and Superannuation Laws Amendment (2016 Measures No. 2) Regulation 2016
Principal Regulations. These Regulations repeal the Corporations Regulations 1990 and the Partnerships and Associations Application Order 1999 (No. 1)
Administered by: Treasury
Registered 12 Jul 2016
Start Date 01 Jul 2016
End Date 28 Oct 2016
Table of contents.

Corporations Regulations 2001

Statutory Rules No. 193, 2001

made under the

Corporations Act 2001

Compilation No. 124

Compilation date:                              1 July 2016

Includes amendments up to:            F2016L00710

Registered:                                         12 July 2016

This compilation is in 7 volumes

Volume 1:       regulations 1.0.01–6D.5.02

Volume 2:       regulations 7.1.02–7.6.08E

Volume 3:       regulations 7.7.01–8.4.02

Volume 4:       regulations 9.1.01–12.9.03

Volume 5:       Schedules 1, 2 and 2A

Volume 6:       Schedules 3–12

Volume 7:       Endnotes

Each volume has its own contents

 

This compilation includes a commenced amendment made by SLI No. 101, 2013

About this compilation

This compilation

This is a compilation of the Corporations Regulations 2001 that shows the text of the law as amended and in force on 1 July 2016 (the compilation date).

The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.

Uncommenced amendments

The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on the Legislation Register (www.legislation.gov.au). The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the series page on the Legislation Register for the compiled law.

Application, saving and transitional provisions for provisions and amendments

If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.

Editorial changes

For more information about any editorial changes made in this compilation, see the endnotes.

Modifications

If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the series page on the Legislation Register for the compiled law.

Self‑repealing provisions

If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.

  

  

  


Contents

Chapter 7Financial services and markets                                      1

Part 7.7Financial service disclosure                                                                       1

Division 1Preliminary                                                                                              1

7.7.01.................... How documents, information and statements are to be given.. 1

Division 2Financial Services Guide                                                                  2

7.7.02.................... Situations in which Financial Services Guide is not required.. 2

7.7.02A................. Situations when Financial Services Guide is not required.. 5

7.7.03.................... Financial Services Guide given by financial services licensee: description of documents............................................................................................ 6

7.7.03A................. Financial Services Guide given by financial services licensee: compensation arrangements............................................................................................ 7

7.7.04.................... Financial Services Guide given by financial services licensee: remuneration, commission and benefits............................................................................... 7

7.7.04A................. Financial services guide given by financial services licensee: more detailed information about remuneration etc.................................................................. 9

7.7.04AA.............. Financial Services Guide given by financial services licensee: non‑monetary benefit that is not conflicted remuneration................................................. 9

7.7.04AB............... Financial Services Guide given by authorised representative: non‑monetary benefit that is not conflicted remuneration....................................................... 9

7.7.05.................... Record of advice given by financial services licensee....... 10

7.7.05A................. Financial Services Guide given by authorised representative of financial services licensee: authorised representative number...................................... 10

7.7.05B.................. Personalised Financial Services Guide............................. 10

7.7.05C.................. Exemption from providing certain information in a Financial Services Guide         11

7.7.06.................... Financial Services Guide given by authorised representative of financial services licensee: description of documents.................................................. 12

7.7.06A................. Financial Services Guide given by authorised representative of financial services licensee—licence number.................................................................. 13

7.7.06B.................. Financial Services Guide given by authorised representative of financial services licensee: compensation arrangements.............................................. 13

7.7.07.................... Financial Services Guide given by authorised representative of financial services licensee: remuneration, commission and benefits............................ 13

7.7.07A................. Financial services guide given by authorised representative: more detailed information about remuneration etc................................................................ 15

7.7.08.................... Record of advice given by authorised representative of financial services licensee  16

Division 2A—Combined Financial Services Guide and Product Disclosure Statement                                                                                                                      17

7.7.08A................. Combined Financial Services Guide and Product Disclosure Statement  17

Division 2AA—Combined Financial Services Guide and credit guide 19

7.7.08B.................. Modification of section 942DA of the Act....................... 19

Division 2B—Record of small investment advice                                        20

7.7.08C.................. Record of small investment advice—content requirements 20

Division 3Statement of Advice                                                                          21

7.7.09.................... Situations in which statement of advice is not required: further advice    21

7.7.09A................. Situations in which Statement of Advice is not required: small investments threshold.......................................................................................... 21

7.7.09AA.............. Statement of Advice from financial services licensee........ 24

7.7.09AB............... Modification of subsection 947B(4) of the Act................ 24

7.7.09B.................. Statement of Advice from providing entity—information not included in the Statement.......................................................................................... 24

7.7.09BA............... Statement of Advice from authorised representative......... 25

7.7.09BB............... Modification of subsection 947C(4) of the Act................ 26

7.7.09BC............... Statement of Advice given by financial services licensee: non‑monetary benefit that is not conflicted remuneration..................................................... 26

7.7.09BD............... Statement of Advice given by authorised representative: non‑monetary benefit that is not conflicted remuneration..................................................... 26

7.7.09C.................. Requirement to keep Statement of Advice and other documents              27

7.7.10.................... Products for which a Statement of Advice is not required 27

7.7.10AA.............. Obligation on authorised representative to give a financial services guide               27

7.7.10AAA........... Record of advice without a recommendation to purchase or sell—content requirements.......................................................................................... 27

7.7.10AB............... Financial services guide—contents of guide..................... 28

7.7.10AC............... Financial services guide.................................................... 29

7.7.10AD.............. Financial services guide.................................................... 29

7.7.10AE............... Situations in which Statement of Advice not required...... 30

7.7.10AF............... Various consequential amendments to Division 7 of Part 7.7 concerning situations where Financial Services Guides do not have to be given........... 32

7.7.10AG.............. Various consequential amendments to Division 7 of Part 7.7  33

7.7.10AH.............. Business days................................................................... 35

7.7.10AI................ Obligation to warn client that advice does not take account of client’s objectives, financial situation or needs—carbon units, Australian carbon credit units and eligible international emissions units................................................................. 35

7.7.10A................. Statements of Advice—requirement to state information as amounts in dollars       36

7.7.10B.................. Insertion of definition—further advice.............................. 36

7.7.10C.................. Omission of definition—further market‑related advice..... 37

7.7.10D................. Additional information in Statement of Advice................. 37

7.7.10E.................. Additional information in Statement of Advice................. 37

7.7.11.................... Statement of Advice given by financial services licensee.. 37

7.7.11A................. Statement of Advice given by authorised representative of financial services licensee—licence number.................................................................. 38

7.7.11B.................. Statement of Advice—disclosure of dollar amounts......... 38

7.7.12.................... Statement of Advice given by authorised representative of financial services licensee.......................................................................................... 38

7.7.13.................... Statement of Advice provided by authorised representative—disclosure of dollar amounts.......................................................................................... 39

7.7.13A................. Additional information about charges or benefits—disclosure of dollar amounts    40

7.7.13B.................. Additional information about charges or benefits—disclosure of dollar amounts    40

Division 4—General advice provided to a retail client                            42

7.7.14.................... Product Disclosure Statement not required....................... 42

Division 5—Other disclosure requirements                                                    43

7.7.20.................... General advice to retail client—no obligation to warn client 43

7.7.20A................. Extension of disclosure requirements to wholesale clients dealing with certain unauthorised insurers............................................................................. 43

Division 6—Exemptions from application of Part 7.7 of the Act        45

7.7.21.................... Exemption from application of Part 7.7 of the Act............ 45

Part 7.7A—Best interests obligations and remuneration                             46

Division 2—Best interests obligations                                                                46

7.7A.05................. Best interests duty—basic banking products etc............... 46

7.7A.06................. Best interests duty—general insurance products............... 46

7.7A.07................. Best interests duty—basic banking products.................... 46

Division 3—Charging ongoing fees to clients                                                47

7.7A.10................. Arrangements that are not ongoing fee arrangements....... 47

7.7A.11................. Fee disclosure statements: product fee.............................. 47

Division 4—Conflicted remuneration                                                                48

Subdivision 1—Monetary benefits                                                                       48

7.7A.12................. What subdivision is about................................................. 48

7.7A.12A.............. Life risk insurance products.............................................. 48

7.7A.12B............... Stamping fees................................................................... 48

7.7A.12C............... Time‑sharing schemes...................................................... 49

7.7A.12D.............. Brokerage fees.................................................................. 49

7.7A.12E............... Fees paid by clients for dealing services........................... 51

7.7A.12EA............ Application of ban on conflicted remuneration—purchase or sale of financial advice business.......................................................................................... 51

Subdivision 2—Monetary or non‑monetary benefits                                      51

7.7A.12F............... What subdivision is about................................................. 51

7.7A.12G.............. General insurance............................................................. 52

7.7A.12H.............. Basic banking and general insurance products.................. 52

7.7A.12I................ Mixed benefits.................................................................. 52

7.7A.13................. Non‑monetary benefit given in certain circumstances not conflicted remuneration: prescribed amount.............................................................................. 53

7.7A.14................. Non‑monetary benefit given in certain circumstances not conflicted remuneration: education or training course.............................................................. 53

7.7A.15................. Non‑monetary benefit given in certain circumstances not conflicted remuneration: other education and training benefit........................................... 54

7.7A.15A.............. Non‑monetary benefit given in certain circumstances not conflicted remuneration—education and training in conducting a financial services business... 54

7.7A.15B............... Application of ban on conflicted remuneration—non‑platform operator (Division 4 of Part 7.7A of Chapter 7 of the Act does not apply)............ 54

7.7A.16................. Application of ban on conflicted remuneration—platform operator (Division 4 of Part 7.7A of Chapter 7 of the Act does not apply)............................ 55

7.7A.16A.............. Application of ban on conflicted remuneration—platform operator (Division 4 of Part 7.7A of Chapter 7 of the Act applies)........................................ 55

7.7A.16B............... Application of ban on conflicted remuneration—person other than platform operator (Division 4 of Part 7.7A of Chapter 7 of the Act applies) 56

7.7A.16BA............ Sale of business................................................................ 58

7.7A.16C............... Application of ban on conflicted remuneration—employer and employee (Division 4 of Part 7.7A of Chapter 7 of the Act does not apply)............ 58

7.7A.16D.............. Application of ban on conflicted remuneration—new arrangement entered into on or after application day (Division 4 of Part 7.7A of Chapter 7 of the Act does not apply)   59

7.7A.16E............... Application of ban on conflicted remuneration—change of party to an arrangement (Division 4 of Part 7.7A of Chapter 7 of the Act does not apply)            60

7.7A.16F............... Application of ban on conflicted remuneration—benefit is a pass through of a grandfathered benefit (benefit is not conflicted remuneration)................. 60

Subdivision 3—Asset‑based fees on borrowed amounts                                 61

7.7A.17................. Financial services licensees............................................... 61

7.7A.18................. Authorised representatives................................................ 61

Division 6—Exemptions from application of Part 7.7A of the Act    62

7.7A.40................. Exemption from application of Part 7.7A of the Act......... 62

Part 7.8Other provisions relating to conduct etc connected with financial products and financial services, other than financial product disclosure     63

7.8.01.................... Obligation to pay money into an account.......................... 63

7.8.02.................... Accounts maintained for section 981B of the Act............. 65

7.8.03.................... How money to be dealt with if licensee ceases to be licensed etc             68

7.8.04.................... Money to which Subdivision A of Division 2 of Part 7.8 of the Act applies taken to be held in trust: breach of financial services law........................... 69

7.8.05.................... Money to which Subdivision A of Division 2 of Part 7.8 of the Act applies taken to be held in trust: risk accepted by insurer....................................... 70

7.8.06.................... Statement setting out terms of loan etc.............................. 70

7.8.06A................. Property exempt from Division 3 of Part 7.8 of the Act... 70

7.8.07.................... How property to which Division 3 of Part 7.8 of the Act to be dealt with               70

7.8.08.................... Debts of financial services licensee in relation to premiums etc               72

7.8.08A................. Limit of margin lending facility taken to be increased....... 76

7.8.08B.................. Exemption from requirement to make unsuitability assessment               77

7.8.09.................... Reasonable inquiries etc about retail client: inquiries........ 78

7.8.09A................. Modification of section 985G of the Act.......................... 79

7.8.10.................... Circumstances in which margin lending facility is unsuitable  79

7.8.10A................. Margin lending facility taken not to be unsuitable............. 79

7.8.11.................... Particular categories of information to be shown in records 79

7.8.11A................. Particular categories of information to be shown in records: records of non‑monetary benefit that is not conflicted remuneration.................................... 80

7.8.12.................... Requirements in relation to financial records of financial services licensees            81

7.8.12A................. Modification of section 989B of the Act........................... 81

7.8.13.................... Auditor’s report with annual profit and loss statement and balance sheet                83

7.8.13A................. Compliance certificate with profit and loss statement and balance sheet   83

7.8.14.................... Contents of annual profit and loss statement and balance sheet and applicable accounting procedures........................................................................ 84

7.8.14A................. Lodgement of annual profit and loss statement and balance sheet            84

7.8.14B.................. Modification of section 990B of the Act........................... 84

7.8.15.................... Appointment of auditor by financial services licensee...... 86

7.8.16.................... When person is ineligible to act as auditor of financial services licensee  87

7.8.17.................... Priority to clients’ orders.................................................. 89

7.8.18.................... Instructions to deal through licensed markets................... 89

7.8.19.................... Records of instructions to deal on licensed markets and foreign markets 91

7.8.20.................... Dealings with non‑licensees............................................. 92

7.8.20A................. Dealings involving employees of financial service licensees—risk insurance products.......................................................................................... 94

7.8.21.................... Dealings involving employees of financial services licensees  94

7.8.21A................. Anti‑hawking provisions if no Product Disclosure Statement is required                95

7.8.21B.................. Anti‑hawking provisions if no Product Disclosure Statement is required—carbon units, Australian carbon credit units and eligible international emissions units  96

7.8.22.................... Hours for hawking certain financial products................... 96

7.8.22A................. Modification of Part 7.8.................................................... 97

7.8.23.................... Return of financial product: transfer between superannuation entities or RSAs       97

7.8.24.................... Right of return not to apply............................................... 97

7.8.25.................... Variation of amount to be repaid....................................... 98

7.8.26.................... Exemption from application of section 992A of the Act... 98

Part 7.9Financial product disclosure and other provisions relating to issue and sale of financial products                                                                                             99

Division 1Preliminary                                                                                            99

7.9.01.................... Interpretation..................................................................... 99

7.9.02.................... Sub‑plans........................................................................ 101

7.9.02A................. Alternative ways of giving Statement............................. 102

7.9.02B.................. Product Disclosure Statement in electronic form............ 102

Division 2Arrangements for Product Disclosure Statements in relation to superannuation products and RSA products                                                        104

Subdivision 2.1—Preliminary                                                                            104

7.9.03.................... Application of Division 2............................................... 104

Subdivision 2.2—Late provision of Product Disclosure Statement for certain members of regulated superannuation fund, public offer superannuation fund or successor fund      104

7.9.04.................... Product Disclosure Statement to be provided later.......... 104

Subdivision 2.3—Product Disclosure Statement for retirement savings account          105

7.9.05.................... Situation in which Product Disclosure Statement is not required             105

Subdivision 2.4—Additional obligations for eligible rollover funds        105

7.9.06A................. Relevant superannuation entities..................................... 105

7.9.06B.................. Application forms........................................................... 105

Subdivision 2.5—Product Disclosure Statement for insurance options   105

7.9.07.................... Modification of Act: Product Disclosure Statement in relation to insurance options........................................................................................ 105

Division 2A—Product Disclosure Statement for warrants                  106

7.9.07A................. Warrants......................................................................... 106

Division 2B—Product Disclosure Statement for market‑traded derivatives      108

7.9.07B.................. Product Disclosure Statements for certain market‑traded derivatives       108

7.9.07C.................. Remedies for Product Disclosure Statements for certain market‑traded derivatives 109

Division 2BA—Product Disclosure Statement for discretionary mutual funds 110

7.9.07CA............... Extension of Product Disclosure Statement requirements to wholesale clients        110

Division 2C—Situations where a Product Disclosure Statement is not required              111

7.9.07D................. Product Disclosure Statement not required for offers of bundled contracts of insurance........................................................................................ 111

7.9.07E.................. Product Disclosure Statement not required if offer of financial product is declined 111

7.9.07F.................. Product Disclosure Statement not required if the client is not contactable                111

7.9.07FA............... Product Disclosure Statement not required for certain specified products                112

7.9.07FB............... Product Disclosure Statement not required if client not in this jurisdiction              113

7.9.07FC............... Product Disclosure Statement not required general insurance situation    113

Division 2D—Preparation and content of Product Disclosure Statements          115

7.9.07J................... Only 1 responsible person for a Product Disclosure Statement               115

7.9.07K.................. Definition of defective: Product Disclosure Statement, Short‑Form PDS or Replacement Product Disclosure Statement......................................... 115

Division 2E—Obligation to make information publicly available: registrable superannuation entities                                                                                                     116

Subdivision 2E.1—Obligation to make product dashboard publicly available             116

7.9.07L.................. Modification of Act........................................................ 116

7.9.07M................. Source of power for this Subdivision............................. 116

7.9.07N................. Definitions...................................................................... 116

7.9.07P.................. Meaning of MySuper product dashboard reporting standards               117

7.9.07Q................. Product dashboard—how information must be set out... 117

7.9.07R.................. Product dashboard—return target................................... 117

7.9.07S.................. Product dashboard—return............................................. 118

7.9.07T.................. Product dashboard—comparison between return target and return          118

7.9.07U................. Comparison to be set out as a graph............................... 119

7.9.07V................. Product dashboard—level of investment risk................. 120

7.9.07W................. Product dashboard—statement of fees and other costs... 120

Division 3Dealing with money received for financial product before the product is issued                                                                                                                    121

7.9.08.................... Accounts......................................................................... 121

7.9.08A................. Dealing with interest....................................................... 121

7.9.08B.................. Crediting of payments before money is received............ 122

7.9.08C.................. Money held in trust for a superannuation product or RSA product         122

7.9.08D................. Statutory funds under the Life Insurance Act 1995......... 123

Division 4Content of Product Disclosure Statements                         124

Subdivision 4.1—Preliminary                                                                            124

7.9.09.................... Application of Division 4............................................... 124

Subdivision 4.1A—No Product Disclosure Statement for carbon units, Australian carbon credit units and eligible international emissions units                          124

7.9.09A................. Application of Subdivision............................................. 124

7.9.09B.................. Provisions of Part 7.9 of Act that do not apply in relation to carbon units, Australian carbon credit units and eligible international emissions units...... 124

7.9.09C.................. Modification of Act........................................................ 125

Subdivision 4.2A—Form and content of Product Disclosure Statement for margin loan           125

7.9.11.................... Application of Subdivision 4.2A.................................... 125

7.9.11A................. Provisions of Part 7.7 of Act that do not apply in relation to margin loan                125

7.9.11B.................. Definitions for Subdivision 4.2A................................... 125

7.9.11C.................. Modification of Act—margin loan.................................. 126

7.9.11D................. Form and content of Product Disclosure Statement for margin loan        126

7.9.11E.................. Requirements for references to incorporated information for margin loan               126

7.9.11F.................. Retention of copies of Product Disclosure Statement for margin loan     127

7.9.11G................. Requirement to provide copy of Product Disclosure Statement for margin loan free of charge........................................................................................ 128

7.9.11H................. Notification about change to Approved Securities List or current interest rate for margin loan........................................................................................ 128

Subdivision 4.2B—Content of Product Disclosure Statement for superannuation product        128

7.9.11K.................. Application of Subdivision 4.2B.................................... 128

7.9.11L.................. Provisions of Part 7.7 of Act that do not apply in relation to superannuation product........................................................................................ 129

7.9.11LA............... Attribution of accrued default amount to MySuper product—exemption from significant event notice requirements................................................ 129

7.9.11LB............... Attribution of accrued default amount to MySuper product—modification of significant event notice requirements......................................................... 129

7.9.11M................. Provisions of Part 7.9 of Act that do not apply in relation to superannuation product........................................................................................ 130

7.9.11N................. Modification of Act—superannuation product............... 130

7.9.11O................. Form and content of Product Disclosure Statement for superannuation product      130

7.9.11P.................. Requirements for references to incorporated information for superannuation product........................................................................................ 131

7.9.11Q................. Retention of copies of Product Disclosure Statement for superannuation product   132

7.9.11R.................. Requirement to provide copy of Product Disclosure Statement for superannuation product free of charge.................................................................. 133

Subdivision 4.2C—Content of Product Disclosure Statement for simple managed investment scheme                                                                                                       133

7.9.11S.................. Application of Subdivision 4.2C.................................... 133

7.9.11T.................. Provisions of Part 7.7 of Act that do not apply in relation to simple managed investment scheme............................................................................ 134

7.9.11U................. Provisions of Part 7.9 of Act that do not apply in relation to simple managed investment scheme............................................................................ 134

7.9.11V................. Modification of Act—simple managed investment scheme 134

7.9.11W................. Form and content of Product Disclosure Statement for simple managed investment scheme........................................................................................ 135

7.9.11X................. Requirements for references to incorporated information for simple managed investment scheme............................................................................ 135

7.9.11Y................. Retention of copies of Product Disclosure Statement for simple managed investment scheme........................................................................................ 136

7.9.11Z.................. Requirement to provide copy of Product Disclosure Statement for simple managed investment scheme free of charge................................... 137

Subdivision 4.3—Other arrangements for Product Disclosure Statements and application forms                                                                                                       137

7.9.12.................... Modification of Act: Product Disclosure Statements and application forms for standard employer‑sponsors and successor funds........................ 137

7.9.13.................... Offer of superannuation interest without application or eligible application             137

7.9.14.................... Remedies for person acquiring financial product under defective Product Disclosure Statement: superannuation and RSAs............................. 138

7.9.14A................. Treatment of arrangements under which a person can instruct another person to acquire a financial product............................................................. 139

Subdivision 4.4—Product information for certain insurance products   139

7.9.14B.................. Product information........................................................ 139

Division 4A—General                                                                                              141

7.9.14C.................. Labour standards and environmental, social and ethical considerations   141

7.9.14D................. Further statements required in Product Disclosure Statement—financial claims scheme........................................................................................ 141

7.9.15.................... More detailed information in Product Disclosure Statement: unauthorised foreign insurer........................................................................................ 142

7.9.15A................. Product Disclosure Statements—requirement to state information as amounts in dollars........................................................................................ 143

7.9.15B.................. Product Disclosure Statements—disclosure of dollar amounts                143

7.9.15C.................. Product Disclosure Statements—disclosure of dollar amounts                144

7.9.15CA............... Less information in Product Disclosure Statement—financial claims scheme          145

7.9.15D................. Less information in product disclosure statement: general insurance product          145

7.9.15DA.............. Statement or information not included in a Product Disclosure Statement               145

7.9.15DB............... Requirement to keep record of Product Disclosure Statement and other documents........................................................................................ 146

7.9.15DC............... Requirement to lodge documents mentioned in a Product Disclosure Statement with ASIC........................................................................................ 147

7.9.15E.................. More detailed information in product disclosure statement: general insurance product........................................................................................ 147

7.9.15F.................. Product disclosure statement: general insurance product 147

7.9.15FA............... Transitional arrangements for regulations 7.9.15D, 7.9.15E and 7.9.15F                147

7.9.15G................. Business days................................................................. 148

7.9.15H................. New section 1012G: product disclosure statement may sometimes be provided later........................................................................................ 148

7.9.15I................... Modification of section 1012IA...................................... 150

7.9.16.................... More detailed information in Product Disclosure Statement: consumer credit insurance product............................................................................ 150

7.9.16A................. Small scale offerings of managed investment and other prescribed financial products (20 issues or sales in 12 months).......................................... 151

Division 4B—Ongoing disclosure                                                                       152

7.9.16G................. Ongoing disclosure of material changes and significant events                152

Division 4C—Fee Disclosure for certain financial products               153

Subdivision 4C.1—Application                                                                           153

7.9.16J................... Application of Division 4C to financial products............ 153

7.9.16JA................ Application of Division 4C to financial products—temporary arrangements           153

7.9.16K.................. Application of Division 4C to periodic statements and Product Disclosure Statements........................................................................................ 153

Subdivision 4C.2—Product Disclosure Statements                                        154

7.9.16L.................. More detailed information about fees and costs.............. 154

7.9.16M................. Modification of section 1015C of the Act....................... 154

7.9.16N................. Presentation, structure and format of fees and costs in Product Disclosure Statements........................................................................................ 154

Subdivision 4C.3—Periodic statements                                                            154

7.9.16O................. Presentation, structure and format of fees and charges in periodic statements          154

Division 4D—Other requirements relating to Product Disclosure Statements and Supplementary Product Disclosure Statements                156

Subdivision 4D.1—Requirement to lodge a notice with ASIC                     156

7.9.16T.................. Variation of paragraph 1015D(2)(b) of the Act.............. 156

Division 5—Ongoing requirements for product disclosure after person becomes a member                                                                                                                    157

Subdivision 5.1—Preliminary                                                                            157

7.9.17.................... Application of Division 5............................................... 157

Subdivision 5.2—Periodic statements for retail clients for financial products that have an investment component: regulated superannuation funds, ADFs and RSAs             157

7.9.18.................... Application of Subdivision 5.2....................................... 157

7.9.19.................... Specific requirements for periodic statements: superannuation funds (other than self managed superannuation funds) and RSAs................................... 157

7.9.19A................. Withdrawal benefit—fees, charges or expenses.............. 158

7.9.19B.................. Withdrawal benefit—fees, charges and expenses........... 159

7.9.20.................... Specific requirements for certain periodic statements: superannuation funds (other than self managed superannuation funds)..................................... 159

7.9.20AA.............. Specific requirements for certain periodic statements: superannuation funds (other than self managed superannuation funds)—long‑term returns...... 161

7.9.20A................. Details of other significant benefits—disclosure of fees, charges or expenses         163

7.9.20B.................. Other significant benefits—disclosure of fees, charges or expenses        164

7.9.21.................... Specific requirements in particular cases: member (other than capital guaranteed member) of fund other than a self managed superannuation fund...... 165

7.9.22.................... Specific requirements: capital guaranteed funds and RSAs 165

7.9.23.................... Information for capital guaranteed fund: benefits reach $10 000              166

7.9.24.................... Modification of Act: pensioners, members subject to compulsory protection of small amounts and members with small amounts that are expected to grow quickly         166

Subdivision 5.3—Periodic statements for retail clients for financial products that have an investment component: information for RSAs                                       166

7.9.25.................... Application of Subdivision 5.3....................................... 166

7.9.26.................... Specific requirements where applicable: RSAs............... 167

7.9.27.................... Modification of Act: periodic statements for RSA holders 168

7.9.28.................... Information for RSA: amount reaches $10 000.............. 168

Subdivision 5.4—Periodic statements for retail clients for financial products that have an investment component: additional information for superannuation entities and RSA providers                                                                                                       168

7.9.29.................... Application of Subdivision 5.4....................................... 168

7.9.30.................... Additional information for change to choices................. 168

Subdivision 5.4A—Periodic statements for retail clients for financial products that have an investment component: additional information for margin lending facilities 169

7.9.30A................. Application of Subdivision 5.4A.................................... 169

7.9.30B.................. Details to be included in periodic statements for margin lending facilities                169

Subdivision 5.5—Fund information for retail clients for financial products that have an investment component: superannuation                                                   170

7.9.31.................... Application of Subdivision 5.5....................................... 170

7.9.32.................... Reporting periods: general.............................................. 170

7.9.33.................... Use of more than 1 document......................................... 171

Subdivision 5.6—Fund information for retail clients for financial products that have an investment component: fund information for regulated superannuation funds and ADFs 171

7.9.34.................... Application of Subdivision 5.6....................................... 171

7.9.35.................... General requirement........................................................ 171

7.9.36.................... Specific requirements in all cases.................................... 171

7.9.37.................... Specific requirements in particular cases......................... 171

7.9.38.................... Specific information in particular case: self managed superannuation fund              174

7.9.39.................... Benefits determined by life insurance products............... 174

Subdivision 5.7—Fund information for retail clients for financial products that have an investment component: fund information for pooled superannuation trusts         175

7.9.40.................... Application of Subdivision 5.7....................................... 175

7.9.41.................... Specific requirements in all cases.................................... 175

7.9.42.................... Specific requirements in particular cases......................... 175

Subdivision 5.8—Ongoing disclosure of material changes and significant events        176

7.9.43.................... Modification of Act: disclosure of material changes and significant events in relation to superannuation products and RSA products................... 176

7.9.44.................... Benefits to be paid to eligible rollover fund.................... 177

Subdivision 5.9—Information on request: members                                    178

7.9.45.................... Regulated superannuation funds, ADFs and pooled superannuation trusts             178

7.9.46.................... RSAs.............................................................................. 178

Subdivision 5.10—Information on request: payments                                 179

7.9.47.................... Modification of Act: charges for information requested. 179

Subdivision 5.11—Information about complaints                                         179

7.9.48.................... Source of power for this Subdivision............................. 179

7.9.48A................. Definitions...................................................................... 179

7.9.48B.................. Complaints—general...................................................... 179

7.9.48C.................. Complaints about benefits other than death benefits—decision made      180

7.9.48D................. Complaints about benefits other than death benefits—no decision made 180

7.9.48A................. Definitions...................................................................... 180

7.9.48B.................. Complaints—general...................................................... 181

Subdivision 5.12—Periodic report when product holder ceases to hold product: superannuation products and RSA products                                                    181

7.9.49.................... Application of Subdivision 5.12..................................... 181

7.9.50.................... Exit reporting period....................................................... 182

7.9.51.................... Time for compliance....................................................... 182

7.9.52.................... General requirement........................................................ 182

7.9.53.................... Information on death of product holder.......................... 182

7.9.54.................... Specific requirements in all cases.................................... 182

7.9.55.................... Specific requirements in particular cases......................... 183

7.9.56.................... Exceptions to exit reporting period provisions: superannuation products and RSA products........................................................................................ 183

7.9.57.................... Exception—members subject to compulsory protection of small amounts               183

7.9.58.................... Information to be given in cases other than death of RSA holder            184

7.9.59.................... Information to be given where applicable....................... 184

7.9.60.................... Modification of Act: exceptions to exit reporting period provisions        184

Division 5AA—General requirements for financial disclosure          185

7.9.60A................. Modification of Act: disclosure...................................... 185

7.9.60B.................. Disclosure of transactions in periodic statements............ 185

Division 5AB—Short‑Form Product Disclosure Statements               187

7.9.61AA.............. Modification of the Act: Short‑Form Product Disclosure Statements      187

Division 5A—Dealing with money received for financial product before the product is issued                                                                                                                    189

7.9.61A................. Lost application money................................................... 189

7.9.61B.................. Issue of substitute insurance product.............................. 189

7.9.61C.................. Cheques.......................................................................... 190

Division 5B—Confirming transactions                                                           191

7.9.61D................. Transactions involving superannuation products............ 191

Division 5C—CGS depository interests                                                          192

7.9.61E.................. CGS depository interest information website................. 192

Division 6Confirmation of transactions                                                     193

7.9.62.................... Confirmation of transaction: superannuation products and RSAs            193

7.9.63.................... Confirmation of transactions: precise costs of transaction not known      195

7.9.63A................. Persons who must confirm transactions......................... 195

7.9.63B.................. Content of confirmation of transactions—general........... 196

7.9.63C.................. Confirmation of transaction—multiple transactions........ 197

7.9.63D................. Confirmation of transaction—information about cooling‑off period        198

7.9.63E.................. Confirmation of transaction—facility that provides written confirmation 199

7.9.63F.................. Confirmation of transaction—acquisition of financial product 199

7.9.63G................. Confirmation of transaction—disposal of financial product 199

7.9.63H................. Certain product issuers and regulated persons must meet appropriate dispute resolution requirements—self managed superannuation funds........ 199

7.9.63I................... Confirmation of transaction in electronic form................ 199

Division 7Cooling‑off periods                                                                          201

7.9.64.................... Cooling‑off periods not to apply..................................... 201

7.9.64A................. Notification of exercise of right of return—risk insurance products        202

7.9.65.................... Return of financial product: general................................ 202

7.9.66.................... Return of financial product: superannuation and RSAs.. 202

7.9.67.................... Variation of amount to be repaid..................................... 203

7.9.68.................... Modification of section 1019B of the Act: client includes standard employer‑sponsor........................................................................................ 205

7.9.69.................... Modification of provisions of Division 5 of Part 7.9 of the Act: terms of contract  206

7.9.70.................... Modification of provisions of Division 5 of Part 7.9 of the Act: distributions         207

Division 8Other requirements                                                                         208

7.9.71.................... Modification of section 1017D of the Act: use of more than 1 document                208

7.9.71A................. Periodic statements—exemption for passbook accounts. 208

7.9.72.................... Modification of section 1017D of the Act: information already given     208

7.9.73.................... Reporting periods: general.............................................. 208

7.9.74.................... Form of application......................................................... 208

7.9.74A................. Periodic statements—requirement to state information as amounts in dollars          209

7.9.75.................... Content of periodic statements: costs of transactions...... 210

7.9.75A................. Ways of giving information............................................ 212

7.9.75B.................. Information in electronic form........................................ 212

7.9.75BA............... Fund information made available on a website............... 213

7.9.75C.................. Periodic statements—disclosure of amounts................... 213

7.9.75D................. Periodic statements—disclosure of amounts................... 214

7.9.76.................... Consents to certain statements........................................ 215

7.9.77.................... Alternative dispute resolution requirements—product issuer that is not a financial services licensee........................................................................... 215

7.9.78.................... Additional statement: trustee required to provide benefits 216

7.9.80B.................. Short selling of certain warrants..................................... 216

Division 9—Additional requirements for transfer of lost members and lost RSA holders                                                                                                                    218

7.9.81.................... Lost members................................................................. 218

7.9.82.................... Lost RSA holders........................................................... 218

Division 11—Superannuation to which arrangements apply under the Family Law Act 1975                                                                                                                    219

7.9.84.................... Definitions for Division 11............................................. 219

7.9.85.................... Application of Division 11............................................. 220

7.9.86.................... Acquisition of financial product...................................... 220

7.9.87.................... Modification of Act: Product Disclosure Statement in relation to superannuation interest under Family Law Act.................................................... 220

7.9.88.................... Statement content in relation to superannuation interest under Family Law Act: superannuation fund....................................................... 221

7.9.89.................... Statement content in relation to superannuation interest under Family Law Act: RSA........................................................................................ 222

7.9.90.................... Information for existing holders of superannuation products and RSA products in relation to superannuation interest................................................... 222

7.9.91.................... Periodic statements for retail clients for financial products that have an investment component—general....................................................... 223

7.9.92.................... Periodic statements for retail clients for financial products that have an investment component—superannuation interest other than percentage‑only interest                223

7.9.93.................... Trustees of superannuation entities—additional obligation to provide information in relation to superannuation interest............................................... 224

7.9.94.................... Division 5 of Part 7.9 of the Act not to apply in relation to non‑member spouse     224

Division 12—Medical indemnity insurance                                                   225

7.9.95.................... Medical indemnity insurance—exemption from product disclosure provisions       225

Division 13—Unsolicited offers to purchase financial products off market        226

7.9.96.................... Percentage increase or decrease in the market value of a product             226

7.9.97.................... Off‑market trading by professional investors etc............ 226

7.9.97A................. Information in offer document if payment is to be made in instalments   226

Division 14—Exemptions from Parts 7.7, 7.8 and 7.9 of the Act     228

7.9.98.................... Certain providers of financial services exempted from the requirements of Parts 7.7, 7.8 and 7.9 of the Act.................................................................. 228

7.9.98A................. Exemption from application of Part 7.9 of the Act.......... 228

Division 15—Disclosure in relation to short sales covered by securities lending arrangement of listed section 1020B products                                               229

7.9.99.................... Interpretation................................................................... 229

7.9.100.................. Seller disclosure.............................................................. 229

7.9.100A............... Seller disclosure of existing short position..................... 231

7.9.101.................. Licensee disclosure......................................................... 231

7.9.102.................. Public disclosure of information..................................... 231

Part 7.10—Market misconduct and other prohibited conduct relating to financial products and financial services                                                                                    233

7.10.01.................. Division 3 financial products.......................................... 233

7.10.02.................. Professional standards schemes...................................... 233

7.10.03.................. Exemption for market participants of qualifying gas trading exchange    235

Part 7.11Title and transfer                                                                                      236

Division 1Preliminary                                                                                          236

7.11.01.................. Definitions...................................................................... 236

7.11.03.................. Arrangements about Division 4 financial products......... 237

7.11.04.................. Arrangements for forms................................................. 238

7.11.05.................. Document duly completed in accordance with a particular form              239

7.11.06.................. Stamping of documents.................................................. 239

7.11.07.................. Application of Division 3 of Part 7.11 of the Act to certain bodies          240

7.11.08.................. Interests in registered schemes........................................ 240

Division 2Application of Part 7.11                                                               241

7.11.09.................. Application..................................................................... 241

Division 3Transfer of Division 3 securities effected otherwise than through a prescribed CS facility                                                                                             242

7.11.10.................. Application of Division 3............................................... 242

7.11.11.................. Sufficient transfer: general.............................................. 242

7.11.12.................. Sufficient transfer of Division 3 assets: licensed trustee company or Public Trustee of a State or Territory..................................................................... 242

7.11.13.................. Sufficient transfer of Division 3 rights: licensed trustee company or Public Trustee of a State or Territory..................................................................... 243

7.11.14.................. Sufficient transfer........................................................... 243

7.11.15.................. Transferee’s execution of transfer of Division 3 assets.. 243

7.11.16.................. Transferee’s execution of transfer of Division 3 rights... 243

7.11.17.................. Transfer document that purports to bear stamp of transferor's broker      244

7.11.18.................. Warranties by market licensee if transfer document purports to bear its stamp        245

7.11.19.................. Indemnities by market licensee and broker if transfer document purports to bear their stamps........................................................................................ 246

7.11.20.................. Joint and several warranties and liabilities...................... 246

7.11.21.................. Registration of certain instruments.................................. 247

7.11.22.................. Details to be included in instrument of transfer............... 247

Division 4Transfer of Division 4 financial products effected through prescribed CS facility                                                                                                                    248

7.11.23.................. Application of Division 4............................................... 248

7.11.24.................. Application of ASTC operating rules............................. 248

7.11.25.................. Participant’s authority to enter into transaction continues despite client’s death       248

7.11.26.................. Authority to enter into transaction gives authority to transfer.. 248

7.11.27.................. Effect of proper ASTC transfer on transferee: Division 4 financial products other than rights........................................................................................ 249

7.11.28.................. Effect of proper ASTC transfer on transferee: rights...... 250

7.11.29.................. Warranties by participant if identification code is included in transfer document     251

7.11.30.................. Indemnities in respect of warranted matters: transfer not effected by the participant........................................................................................ 252

7.11.31.................. Indemnities in respect of warranted matters: transferor not legally entitled or authorised to transfer Division 4 financial products............................. 252

7.11.32.................. Indemnities in respect of warranted matters: participant not authorised to effect transfer........................................................................................ 253

7.11.33.................. Joint and several warranties and liabilities...................... 254

7.11.34.................. ASTC entitled to assume its operating rules complied with 254

7.11.35.................. ASTC‑regulated transfer not to be registered unless proper ASTC transfer            254

7.11.36.................. Issuer not to refuse to register proper ASTC transfer..... 255

7.11.37.................. Determination of who holds Division 4 financial products for the purposes of meeting........................................................................................ 255

7.11.38.................. Determination of who holds Division 4 financial products in class of Division 4 financial products for the purposes of meeting.............................. 255

7.11.39.................. Determination of who holds Division 4 financial products for the purposes of conferring security benefits.............................................................. 256

Division 5Offences                                                                                                 257

7.11.40.................. Stamping of broker’s stamp on sufficient transfer.......... 257

7.11.41.................. Inclusion of identification codes in proper ASTC transfers 258

7.11.42.................. Contravention by participant of the ASTC certificate cancellation provisions relating to use of cancellation stamps......................................................... 258

Division 6Civil liability                                                                                        259

7.11.43.................. Contravention by participant of the ASTC certificate cancellation provisions          259

Part 7.12Miscellaneous                                                                                              260

7.12.01.................. Destruction of records by ASIC..................................... 260

Chapter 8—Mutual recognition of securities offers              261

Part 8.1—Preliminary                                                                                                     261

8.1.01.................... Prescribed foreign recognition scheme (Act s 1200A(1)) 261

8.1.02.................... Prescribed offeror (Act s 1200A(1)).............................. 261

8.1.03.................... Prescribed recognised jurisdiction (Act s 1200A(1))...... 261

Part 8.2—Foreign offers that are recognised in this jurisdiction          262

Division 1—Recognised offers                                                                             262

8.2.01.................... Prescribed offer (Act s 1200C(4)).................................. 262

8.2.02.................... Prescribed warning statements (Act s 1200E)................ 262

8.2.03.................... Prescribed details to be given in warning statements (Act s 1200E(b))    264

8.2.04.................... Prescribed home regulators (Act s 1200G(13) and (14)) 264

Division 4—Modification of the Act in relation to its application to recognised offers for interests in New Zealand managed investment schemes (Act s 1020G, 1200M)                                                                                                                    265