Part 1—Preliminary
1 Name of legislative instrument
This is the ASIC Corporations (Non-cash Payment Facilities) Instrument 2016/211.
4 Authority
This instrument is made under subsections 765A(2) and 1020F(1) and paragraphs 601QA(1)(a), 926A(2)(a), 951B(1)(a) and 992B(1)(a) of the Corporations Act 2001.
5 Definitions
In this instrument:
Act means the Corporations Act 2001.
device means any object by which a person may use a low value non-cash payment facility or gift facility.
eligible non-cash payment facility means a non-cash payment facility that:
(a) is issued by a financial services licensee; or
(b) is issued by a participant in a designated payment system, within the meaning of section 7 of the Payments Systems (Regulation) Act 1998, and that relates to that system.
expiry date means a date after which a non-cash payment facility cannot be used to make non-cash payments.
facility has a meaning affected by section 762C of the Act.
gift facility means a non-cash payment facility in relation to which all of the following apply:
(a) the amount available for making non-cash payments under the facility:
(i) is set when the facility is issued;
(ii) cannot be increased after the facility is issued unless it is because of the reversal of a payment made under the facility or the correction of an error;
(iii) cannot be withdrawn from the facility by means of a cash payment unless all of the following apply:
(A) one or more non-cash payments have already been made using the facility;
(B) the amount available for making non-cash payments is an amount that, in the reasonable opinion of the issuer of the facility, is unlikely to be able to be conveniently used under the facility;
(C) the withdrawal is of the full amount standing to the credit of the facility;
(b) the facility may be used to make non-cash payments on more than one occasion;
(c) the facility is only promoted or marketed as a gift product;
(d) where the facility has an expiry date and the person who holds the facility is provided with a device to use the facility:
(i) the expiry date is prominently set out on the device in a manner that makes it clear that it is an expiry date; or
(ii) the date of issue of the facility (or a date that is no later than 3 months after that date) is prominently set out on the device together with a statement that the facility cannot be used after a specified period after the date set out on the device;
(e) where the facility has an expiry date but no device is provided, the expiry date is prominently displayed in a manner that:
(i) could reasonably be expected to come to the attention of a person who is given, or given use, of the facility at the time it is given and at the time it is used; and
(ii) makes clear that it is an expiry date;
(f) the facility is not a component of another financial product.
low value non-cash payment facility means a non-cash payment facility in relation to which all of the following apply:
(a) the total amount available for making non-cash payments under all facilities of the same class issued by that issuer and held by any person at any one time does not exceed $1,000;
(b) the total amount available for making non-cash payments under all facilities of the same class issued by that issuer does not exceed $10,000,000 at any time;
(c) the facility is not a component of another financial product.
loyalty scheme means a non-cash payment facility in relation to which all of the following apply:
(a) the facility is issued as part of a scheme the dominant purpose of which is to promote the purchase of goods from, or the use of services of, the issuer of the facility or another person;
(b) a person who uses or holds the facility is allocated credits (however described) as a result of the purchase of goods from, or the use of the services of, the issuer of the facility or the other person;
(c) the credits allocated under the facility can be used to make a payment or part payment for goods or services or to obtain some other benefit;
(d) the facility is not a component of another financial product.
makes non-cash payments has the meaning given by section 763D of the Act.
non-cash payment facility means a facility through which, or through the acquisition of which, a person makes non-cash payments.
offer has a meaning affected by subsection 1010C(2) of the Act.
prepaid mobile facility means a non-cash payment facility in relation to which all of the following apply:
(a) the facility is part of an arrangement for the supply of a public mobile telecommunications service under which the service may be used to the extent it is covered by the amount (the prepaid amount) paid in advance which remains unused;
(b) the non-cash payments made under the facility are debited against the prepaid amount;
(c) the facility is not a component of another financial product.
public mobile telecommunications service has the meaning given by section 32 of the Telecommunications Act 1997.
Part 2—Relief for non-cash payment facilities
6 Loyalty schemes
Operation of a loyalty scheme
(1) A person does not have to comply with subsection 601ED(5) of the Act in relation to a loyalty scheme.
Declaration not to be a financial product
(2) A loyalty scheme is not a financial product for the purposes of Chapter 7 of the Act.
7 Road toll facilities
A facility through which, or through the acquisition of which, a person makes a non-cash payment of a toll for the use of a road, but no other kind of non-cash payment, is not a financial product for the purposes of Chapter 7 of the Act.
8 Non-cash payment facilities used for third party payments
A financial services licensee does not have to comply with subsection 911A(1) of the Act for the provision of a financial service if:
(a) the financial service is provided in the ordinary course of the licensee’s business; and
(b) the financial service consists of either or both of the following:
(i) advising a person in relation to an eligible non-cash payment facility that the person may use, or has used, to pay a person other than the licensee for goods or services;
(ii) arranging for a person to deal (other than by way of issue) in an eligible non-cash payment facility that the person may use to pay a person other than the licensee for goods or services; and
(c) the licensee is not the issuer of a non-cash payment facility; and
(d) the licence held by the licensee does not cover the provision of a financial service referred to in paragraph (b).
9 Low value non-cash payment facilities
Exemptions
(1) A person providing financial services in relation to a low value non-cash payment facility does not have to comply with subsection 911A(1), section 992A and Part 7.9 of the Act in relation to those services.
(2) A financial services licensee providing financial services in relation to a low value non-cash payment facility does not have to comply with Part 7.6 (other than subsection 911A(1) and Divisions 4 and 8), Divisions 2, 3 and 4 of Part 7.7 and Divisions 2, 3, 5 and 6 of Part 7.8 in relation to those services.
(3) An authorised representative of a financial services licensee providing financial services in relation to a low value non-cash payment facility does not have to comply with Divisions 2, 3 and 4 of Part 7.7 of the Act in relation to those services.
Note: The person will not be able to rely on the exemptions in the circumstances specified in subsection (6).
Conditions: Issuers of low value non-cash payment facilities
(4) An issuer of a low value non-cash payment facility who relies on any of the exemptions in subsections (1), (2) and (3) must take reasonable steps to ensure that all of the following are satisfied:
(a) before or at the time the low value non-cash payment facility is offered to a person as a retail client, the person is given a written document (disclosure document) which sets out the terms and conditions of the facility and separately sets out in a prominent manner information about:
(i) whether any of the terms and conditions of the facility may be unilaterally varied by the issuer and a statement of how a person (client) who holds the facility may get information about the new terms and conditions;
(ii) whether the facility has an expiry date and, if so, where the expiry date may be found;
(iii) the procedures for dealing with any unauthorised or mistaken transactions relating to the facility or the loss or theft of the device (if any) through which the facility is used;
(iv) fees or charges for acquiring and using the facility and where any fees or charges are subject to change during the life of the facility, a statement of how the client may get information about the new fees or charges;
(b) the information in the disclosure document is worded and presented in a clear, concise and effective manner;
(c) where the facility has an expiry date and the client is provided with a device to use the facility:
(i) the expiry date is prominently set out on the device in a manner that makes it clear that it is an expiry date; or
(ii) the date of the issue of the facility (or a date no later than 3 months after that date) is prominently set out on the device together with a statement that the facility cannot be used after a specified period after the date set out on the device;
(d) where the facility has an expiry date but no device is provided, the expiry date is set out in the disclosure document or in a written statement attached to the disclosure document;
(e) a convenient means is available, that involves no charge by the issuer or its associates, for the client to do all of the following:
(i) check the amount standing to the credit of the facility;
(ii) check any expiry date associated with the facility;
(iii) obtain at reasonable intervals a record of the past 10 transactions under the facility;
(f) if the terms and conditions of the facility are unilaterally varied, or the fees or charges for using the facility are changed during the life of the facility:
(i) information about the variation or change is:
(A) made available to the client in accordance with the information in the disclosure document referred to in paragraph (a)(i) or (iv); and
(B) displayed in a clear and prominent way at each place and each website the facility may be acquired; and
(ii) the new terms and conditions or fees and charges are made available to the client on request;
(g) if a low value non-cash payment facility is issued to a person as a retail client, the issuer maintains an internal dispute resolution procedure that:
(i) complies with standards and requirements made or approved by ASIC for the purposes of subparagraph 912A(2)(a)(i) of the Act, or approved by such an instrument under that provision; and
(ii) covers complaints against the issuer made by retail clients in connection with financial services provided in relation to the facility.
Conditions: Other people
(5) A person who relies upon any of the exemptions in subsections (1), (2) and (3) but is not the issuer of the low value non-cash payment facility must take reasonable steps to ensure that all of the following are satisfied:
(a) before or at the time the low value non-cash payment facility is offered to a person as a retail client, the person is provided with the disclosure document;
(b) where the facility has an expiry date and the client is provided with a device to use the facility:
(i) the expiry date is prominently set out on the device in a manner that makes it clear that it is an expiry date; or
(ii) the date of the issue of the facility (or a date no later than 3 months after that date) is prominently set out on the device together with a statement that the facility cannot be used after a specified period after the date set out on the device;
(c) where the facility has an expiry date but no device is provided, the expiry date is set out in the disclosure document or in a written statement attached to the disclosure document.
Non-compliance with conditions
(6) If a condition in subsection (4) or (5) applies to a person and the person does not comply with the condition, the exemptions in subsections (1), (2) and (3) cease to apply to the person.
10 Gift facilities
(1) A person providing financial services in relation to a gift facility does not have to comply with subsection 911A(1), section 992A and Part 7.9 of the Act in relation to those services.
(2) A financial services licensee providing financial services in relation to a gift facility does not have to comply with Part 7.6 (other than subsection 911A(1) and Divisions 4 and 8), Divisions 2, 3 and 4 of Part 7.7 and Divisions 2, 3, 5 and 6 of Part 7.8 in relation to those services.
(3) An authorised representative of a financial services licensee providing financial services in relation to a gift facility does not have to comply with Divisions 2, 3 and 4 of Part 7.7 of the Act in relation to those services.
11 Prepaid mobile facilities
(1) A person providing financial services in relation to a prepaid mobile facility does not have to comply with subsection 911A(1), section 992A and Part 7.9 of the Act in relation to those services.
(2) A financial services licensee providing financial services in relation to a prepaid mobile facility does not have to comply with Part 7.6 (other than subsection 911A(1) and Divisions 4 and 8), Divisions 2, 3 and 4 of Part 7.7 and Divisions 2, 3, 5 and 6 of Part 7.8 in relation to those services.
(3) An authorised representative of a financial services licensee providing financial services in relation to a prepaid mobile facility does not have to comply with Divisions 2, 3 and 4 of Part 7.7 of the Act in relation to those services.
12 Requirement to confirm transactions for travellers’ cheques
Travellers’ cheques are exempt from section 1017F of the Act.