Federal Register of Legislation - Australian Government

Primary content

Corporations Regulations 2001

Authoritative Version
SR 2001 No. 193 Regulations as amended, taking into account amendments up to Treasury Laws Amendment (Professional Standards Schemes) Regulations 2022
Administered by: Treasury
Registered 04 Apr 2022
Start Date 22 Mar 2022
Table of contents.

Commonwealth Coat of Arms of Australia

Corporations Regulations 2001

Statutory Rules No. 193, 2001

made under the

Corporations Act 2001

Compilation No. 178

Compilation date:                              22 March 2022

Includes amendments up to:            F2022L00350

Registered:                                         4 April 2022

This compilation is in 7 volumes

Volume 1:       regulations 1.0.01–6D.5.03

Volume 2:       regulations 7.1.02–7.6.08E

Volume 3:       regulations 7.7.01–8A.7.20

Volume 4:       regulations 9.1.01–12.9.03

Volume 5:       Schedules 1, 2 and 2A

Volume 6:       Schedules 3–13

Volume 7:       Endnotes

Each volume has its own contents

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 22 March 2022 (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 7.1Preliminary                                                                                                         1

Division 1General                                                                                                      1

7.1.02.................... Participant........................................................................... 1

7.1.03.................... Prescribed CS facility......................................................... 1

7.1.03A................. Basic deposit products........................................................ 1

7.1.03B.................. Self managed superannuation funds................................... 1

7.1.04.................... Derivatives.......................................................................... 1

7.1.04A................. Meaning of kind of financial products (section 1012IA of the Act)         3

7.1.04B.................. Meaning of class of financial products (managed investment schemes)  3

7.1.04C.................. Meaning of class of financial products (superannuation products)          4

7.1.04CAA............ Meaning of claimant intermediary—persons excluded from being claimant intermediaries............................................................................................ 4

7.1.04CA............... Kinds of financial products................................................. 7

7.1.04CB............... When providing certain claims handing and settling services is not the primary part of a business.............................................................................. 7

7.1.04D................. Meaning of issuer for certain derivatives............................ 7

7.1.04E.................. Issue of a new interest in a superannuation fund................ 7

7.1.04F.................. Meaning of class of financial services (subsections 917A(3), 917C(2) and 917C(3) of the Act)..................................................................................... 8

7.1.04G................. Meaning of issuer for a foreign exchange contract............. 8

7.1.04N................. Specific things that are financial products—funding schemes and arrangements relating to insolvency and litigation..................................................... 8

7.1.05.................... Specific things that are not financial products: superannuation interests  10

7.1.06.................... Specific things that are not financial products: credit facility 10

7.1.06A................. Arrangements for certain financial products that are not credit facilities   12

7.1.07.................... Specific things that are not financial products: surety bonds 12

7.1.07A................. Specific things that are not financial products: rental agreements             12

7.1.07B.................. Specific things that are not financial products: bank drafts 13

7.1.07C.................. Specific things that are not financial products: insurance under an overseas student health insurance contract............................................................. 13

7.1.07E.................. Specific things that are not financial products: rights of the holder of a debenture   13

7.1.07F.................. Specific things that are not financial products: money orders.. 13

7.1.07G................. Specific things that are not financial products: electronic funds transfers 13

7.1.07H................. Specific things that are not financial products: ACT insurance                14

7.1.07I................... Specific things that are not financial products—Australian carbon credit units and eligible international emissions units............................................. 14

7.1.07J................... Specific things that are not financial products—carbon abatement           14

7.1.08AA.............. Meaning of financial product advice—advice that is not regarded as a necessary part of providing claims handling and settling services................ 14

7.1.08.................... Meaning of financial product advice: exempt document or statement      15

7.1.08A................. Modification of section 766D of the Act—free carbon units 16

7.1.09.................... Obligations related to clearing and settlement facility........ 17

7.1.10.................... Conduct that does not constitute operating a clearing and settlement facility            17

Division 2Retail clients and wholesale clients                                           19

7.1.11.................... Meaning of retail client and wholesale client: motor vehicle insurance product       19

7.1.12.................... Meaning of retail client and wholesale client: home building insurance product      19

7.1.13.................... Meaning of retail client and wholesale client: home contents insurance product      20

7.1.14.................... Meaning of retail client and wholesale client: sickness and accident insurance product.......................................................................................... 21

7.1.15.................... Meaning of retail client and wholesale client: consumer credit insurance product   22

7.1.16.................... Meaning of retail client and wholesale client: travel insurance product    23

7.1.17.................... Meaning of retail client and wholesale client: personal and domestic property insurance product.............................................................................. 23

7.1.17A................. General insurance products: medical indemnity insurance products         25

7.1.17B.................. Retail clients and wholesale clients: aggregation of amounts for price or value of financial product.............................................................................. 25

7.1.17C.................. Retail clients: traditional trustee company services............ 25

7.1.18.................... Retail clients and wholesale clients: price of investment‑based financial products   26

7.1.19.................... Retail clients and wholesale clients: value of investment‑based financial products   27

7.1.19A................. Retail clients and wholesale clients: price of margin lending facilities      29

7.1.20.................... Retail clients and wholesale clients: price of income stream financial products        30

7.1.21.................... Retail clients and wholesale clients: value of income stream financial products       31

7.1.22.................... Retail clients and wholesale clients: value of derivatives... 33

7.1.22AA.............. Retail clients and wholesale clients: contract for difference 34

7.1.22A................. Retail clients and wholesale clients: value of foreign exchange contracts 35

7.1.23.................... Retail clients and wholesale clients: price of non‑cash payment financial products  36

7.1.24.................... Retail clients and wholesale clients: value of non‑cash payment products                37

7.1.25.................... Retail clients and wholesale clients: life risk insurance and other risk‑based financial products.......................................................................................... 38

7.1.26.................... Superannuation‑sourced money........................................ 38

7.1.27.................... Retail clients and wholesale clients: effect of wholesale status 39

7.1.28.................... Retail clients and wholesale clients: assets and income..... 39

Division 3When does a person provide a financial service?             40

7.1.28AA.............. Provision of financial product advice about default funds 40

7.1.28A................. Circumstances in which a person is taken to be provided a traditional trustee company service.......................................................................................... 40

7.1.29.................... Circumstances in which a person is taken not to provide a financial service            41

7.1.30.................... Information and advice about voting................................. 43

7.1.31.................... Passing on prepared documents........................................ 44

7.1.32.................... Remuneration packages.................................................... 44

7.1.33A................. Allocation of funds available for investment..................... 44

7.1.33B.................. General advice.................................................................. 45

7.1.33D................. Investment‑linked life insurance products......................... 45

7.1.33E.................. Advice about the existence of a custodial or depository service               46

7.1.33F.................. School banking................................................................. 46

7.1.33G................. Certain general advice that does not attract remuneration etc. 46

7.1.33H................. Certain general advice given by a financial product issuer 47

Division 4—Dealings in financial products                                                     48

7.1.34.................... Conduct that does not constitute dealing in a financial product                48

7.1.35.................... Conduct that does not constitute dealing in a financial product                48

7.1.35A................. Conduct that does not constitute dealing in a financial product—lawyers acting on instructions....................................................................... 48

7.1.35B.................. Conduct that does not constitute dealing in a financial product—issuing carbon units, Australian carbon credit units or eligible international emissions units    49

7.1.35C.................. Conduct that does not constitute dealing in a financial product—carbon units, Australian carbon credit units or eligible international emissions units 49

Division 5—Custodial or depository services                                                51

7.1.40.................... Conduct that does not constitute the provision of a custodial or depository service 51

Division 6—Operating a financial market                                                      53

7.1.50.................... Operating a financial market............................................. 53

Part 7.2Licensing of financial markets                                                              54

Division 1Market licensees’ obligations                                                       54

7.2.01.................... Obligation to inform ASIC of certain matters: contraventions of licence or Act      54

7.2.02.................... Obligation to inform ASIC of certain matters: becoming director, secretary or executive officer of market licensee.................................................. 54

7.2.03.................... Obligation to inform ASIC of certain matters: ceasing to be director, secretary or executive officer of market licensee.................................................. 54

7.2.04.................... Obligation to inform ASIC of certain matters: voting power in market licensee      55

7.2.05.................... Giving ASIC information about a listed disclosing entity. 55

7.2.06.................... Annual report of market licensee...................................... 56

Division 2The market’s operating rules and procedures                   57

7.2.07.................... Content of licensed market’s operating rules.................... 57

7.2.08.................... Content of licensed market’s written procedures.............. 58

Division 3Powers of the Minister and ASIC                                              59

7.2.09.................... Agencies for compliance assessment................................ 59

Division 4The Australian market licence: applications (general)  60

7.2.10.................... Application of Division 4................................................. 60

7.2.11.................... Information....................................................................... 60

7.2.12.................... Documents........................................................................ 61

Division 5The Australian market licence: applications (financial market in foreign country)                                                                                                   63

7.2.13.................... Application of Division 5................................................. 63

7.2.14.................... Information....................................................................... 63

7.2.15.................... Documents........................................................................ 63

Division 6The Australian market licence: other matters                   64

7.2.16.................... Potential conflict situations............................................... 64

Part 7.2A—Supervision of financial markets                                                     67

Division 7.2A.1—Enforceable undertakings                                                  67

7.2A.01................. Enforceable undertakings.................................................. 67

Division 7.2A.2—Infringement notices                                                             68

7.2A.02................. Purpose of Division.......................................................... 68

7.2A.03................. Definitions for Division 7.2A.2........................................ 68

7.2A.04................. When infringement notice can be given............................ 69

7.2A.05................. Statement of reasons must be given.................................. 69

7.2A.06................. Contents of infringement notice........................................ 69

7.2A.07................. Amount of penalty payable to the Commonwealth........... 70

7.2A.08................. Compliance with infringement notice................................ 71

7.2A.09................. Extension of compliance period........................................ 71

7.2A.10................. Effect of compliance with infringement notice.................. 72

7.2A.11................. Application to withdraw infringement notice.................... 73

7.2A.12................. Withdrawal of infringement notice by ASIC.................... 73

7.2A.13................. Notice of withdrawal of infringement notice..................... 73

7.2A.14................. Withdrawal of notice after compliance.............................. 74

7.2A.15................. Publication of details of infringement notice..................... 74

Part 7.3Licensing of clearing and settlement facilities                              76

Division 1Regulation of CS facility licensees: licensees’ obligations  76

7.3.01.................... Obligation to inform ASIC of certain matters: becoming director, secretary or executive officer of CS facility licensee............................................ 76

7.3.02.................... Obligation to inform ASIC of certain matters: ceasing to be director, secretary or executive officer of CS facility licensee............................................ 76

7.3.03.................... Obligation to inform ASIC of certain matters: voting power in CS facility licensee.......................................................................................... 77

7.3.04.................... Annual report of CS facility licensee................................ 77

Division 2Regulation of CS facility licensees: the facility’s operating rules and procedures                                                                                                                      78

7.3.05.................... Content of licensed CS facility’s operating rules.............. 78

7.3.06.................... Content of licensed CS facility’s written procedures........ 78

Division 3Regulation of CS facility licensees: powers of the Minister and ASIC        80

7.3.07.................... Agencies for compliance assessment................................ 80

7.3.08.................... Agencies for compliance assessment................................ 80

Division 4The Australian CS facility licence: applications (general) 82

7.3.09.................... Application of Division 4................................................. 82

7.3.10.................... Information....................................................................... 82

7.3.11.................... Documents........................................................................ 83

Division 5The Australian CS facility licence: applications (overseas clearing and settlement facility)                                                                              85

7.3.12.................... Application of Division 5................................................. 85

7.3.13.................... Information....................................................................... 85

7.3.14.................... Documents........................................................................ 85

Part 7.4Limits on involvement with licensees                                                 87

7.4.01.................... Widely held market body.................................................. 87

7.4.02.................... Record‑keeping: market licensee....................................... 87

7.4.03.................... Record‑keeping: CS facility licensee................................. 87

7.4.04.................... Information for widely held market body......................... 88

Part 7.5Compensation regimes for financial markets                              89

Division 1—Preliminary                                                                                            89

7.5.01.................... Definitions for Part 7.5..................................................... 89

7.5.01A................. Modification of Act: compensation regimes..................... 91

7.5.02.................... Meaning of becoming insolvent........................................ 91

7.5.03.................... Meaning of dealer............................................................ 92

7.5.04.................... Meaning of excluded person............................................. 92

7.5.06.................... Meaning of sale and purchase of securities..................... 94

7.5.07.................... Meaning of securities business: general........................... 94

7.5.08.................... Meaning of securities business: Subdivision 4.9.............. 95

7.5.09.................... Meaning of security.......................................................... 95

7.5.10.................... Meaning of transfer of securities...................................... 95

7.5.13.................... Effect of contravention of Part 7.5.................................... 96

Division 2When there must be a compensation regime                       97

7.5.14.................... Application for Australian market licence: information about compensation arrangements.......................................................................................... 97

Division 3