Contents
Chapter 7—Financial services and markets 1
Part 7.7—Financial service disclosure 1
Division 1—Preliminary 1
7.7.01.................... How documents, information and statements are to be given.. 1
Division 2—Financial 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 3—Statement 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
7.7.10AI................ 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..... 36
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.................................................................. 37
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 39
7.7.13B.................. Additional information about charges or benefits—disclosure of dollar amounts 40
Division 4—General advice provided to a retail client 41
7.7.14.................... Product Disclosure Statement not required....................... 41
Division 5—Other disclosure requirements 42
7.7.20.................... General advice to retail client—no obligation to warn client 42
7.7.20A................. Extension of disclosure requirements to wholesale clients dealing with certain unauthorised insurers............................................................................. 42
Division 6—Exemptions from application of Part 7.7 of the Act 44
7.7.21.................... Exemption from application of Part 7.7 of the Act............ 44
Part 7.7A—Best interests obligations and remuneration 45
Division 2—Best interests obligations 45
7.7A.05................. Best interests duty—basic banking products etc............... 45
7.7A.06................. Best interests duty—general insurance products............... 45
7.7A.07................. Best interests duty—basic banking products.................... 45
Division 3—Charging ongoing fees to clients 46
7.7A.10................. Arrangements that are not ongoing fee arrangements....... 46
7.7A.11................. Fee disclosure statements.................................................. 46
7.7A.11AA........... Compliance records required to be kept by fee recipients. 47
Division 4—Conflicted remuneration 48
Subdivision 1—Benefits in relation to life risk insurance products that are conflicted remuneration 48
7.7A.11A.............. What this Subdivision is about......................................... 48
7.7A.11B............... Circumstances in which benefits in relation to life risk insurance products are conflicted remuneration..................................................................... 48
7.7A.11C............... Circumstances in which benefits in relation to information about life risk insurance products are not conflicted remuneration......................................... 49
7.7A.11D.............. Circumstances in which benefits in relation to dealings in life risk insurance products are not conflicted remuneration..................................................... 51
Subdivision 2—Monetary benefits that are not conflicted remuneration 52
7.7A.12................. What subdivision is about................................................. 52
7.7A.12B............... Stamping fees................................................................... 53
7.7A.12C............... Time‑sharing schemes...................................................... 55
7.7A.12D.............. Brokerage fees.................................................................. 55
7.7A.12E............... Fees paid by clients for dealing services........................... 56
7.7A.12EA............ Application of ban on conflicted remuneration—purchase or sale of financial advice business.......................................................................................... 56
Subdivision 3—Monetary benefits that relate to life risk insurance products 57
7.7A.12EB............ Life risk insurance products—clawback requirements related to cancellation etc. 57
7.7A.12EC............ Life risk insurance products—clawback requirements related to reduction of policy cost.......................................................................................... 57
Subdivision 4—Other monetary and non‑monetary benefits that are not conflicted remuneration 58
7.7A.12F............... What subdivision is about................................................. 58
7.7A.12G.............. General insurance............................................................. 58
7.7A.12H.............. Basic banking and general insurance products.................. 58
7.7A.12I................ Mixed benefits.................................................................. 58
7.7A.13................. Non‑monetary benefit given in certain circumstances not conflicted remuneration: prescribed amount.............................................................................. 59
7.7A.14................. Non‑monetary benefit given in certain circumstances not conflicted remuneration: education or training course.............................................................. 59
7.7A.15................. Non‑monetary benefit given in certain circumstances not conflicted remuneration: other education and training benefit........................................... 60
7.7A.15A.............. Non‑monetary benefit given in certain circumstances not conflicted remuneration—education and training in conducting a financial services business... 60
Subdivision 4A—Ban on conflicted remuneration (rebates) 60
7.7A.15AJ............. What Subdivision is about................................................ 60
7.7A.15AK............ Obligations of covered person.......................................... 61
Subdivision 6—Application provisions relating to the Corporations Amendment (Life Insurance Remuneration Arrangements) Act 2017 61
7.7A.16G.............. Definitions........................................................................ 61
7.7A.16H.............. Life risk insurance products substantially related to existing products 62
Subdivision 7—Asset‑based fees on borrowed amounts 62
7.7A.17................. Financial services licensees............................................... 62
7.7A.18................. Authorised representatives................................................ 62
Division 6—Exemptions from application of Part 7.7A of the Act 63
7.7A.40................. Exemption from application of Part 7.7A of the Act......... 63
Part 7.8—Other provisions relating to conduct etc connected with financial products and financial services, other than financial product disclosure 64
Division 2—Dealing with clients’ money 64
Subdivision A—Money other than loans 64
7.8.01A................. Wholesale client money.................................................... 64
7.8.01.................... Obligation to pay money into an account.......................... 64
7.8.02.................... Accounts maintained for section 981B of the Act............. 67
7.8.02A................. Accounts maintained for the purposes of section 981B of the Act—special rules for retail clients................................................................................ 70
7.8.03.................... How money to be dealt with if licensee ceases to be licensed etc 70
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........................... 71
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....................................... 72
Subdivision AA—Client money reporting rules 72
7.8.05A................. Definitions for Subdivision AA of Division 2................. 72
7.8.05B.................. Enforceable undertakings.................................................. 73
7.8.05C.................. Client money reporting infringement notices.................... 73
7.8.05D................. Effect of client money reporting infringement notice provisions 74
7.8.05E.................. Statement of reasons must be given.................................. 74
7.8.05F.................. Contents of client money reporting infringement notice.... 75
7.8.05G................. Amount of penalty payable to the Commonwealth........... 76
7.8.05H................. Compliance with client money reporting infringement notice.. 76
7.8.05J................... Extension of client money reporting infringement notice period 77
7.8.05K.................. Effect of compliance with client money reporting infringement notice 77
7.8.05L.................. Application to withdraw client money reporting infringement notice 78
7.8.05M................. Withdrawal of client money reporting infringement notice by ASIC 79
7.8.05N................. Notice of withdrawal of client money reporting infringement notice 79
7.8.05P.................. Withdrawal of notice after compliance.............................. 79
7.8.05Q................. Publication of details of client money reporting infringement notice 80
Subdivision B—Loan money 81
7.8.06.................... Statement setting out terms of loan etc.............................. 81
Division 3—Dealing with other property of clients 82
7.8.06A................. Property exempt from Division 3 of Part 7.8 of the Act... 82
7.8.06B.................. Wholesale client property.................................................. 82
7.8.07.................... How property to which Division 3 of Part 7.8 of the Act to be dealt with 82
Division 4—Special provisions relating to insurance 85
7.8.08.................... Debts of financial services licensee in relation to premiums etc 85
Division 4A—Special provisions relating to margin lending facilities 89
Subdivision A—Responsible lending conduct for margin lending facilities 89
7.8.08A................. Limit of margin lending facility taken to be increased....... 89
7.8.08B.................. Exemption from requirement to make unsuitability assessment 90
7.8.09.................... Reasonable inquiries etc about retail client: inquiries........ 91
7.8.09A................. Modification of section 985G of the Act.......................... 92
7.8.10.................... Circumstances in which margin lending facility is unsuitable 92
7.8.10A................. Margin lending facility taken not to be unsuitable............. 92
Division 6—Financial records, statements and audit 93
Subdivision B—Financial records of financial services licensees 93
7.8.11.................... Particular categories of information to be shown in records 93