Schedule 1 Amendments commencing on day after registration
(regulation 3)
[1] Paragraph 7.6.01C (1) (h)
omit
events.
insert
events;
[2] After paragraph 7.6.01C (1) (h)
insert
(i) a Replacement Product Disclosure Statement.
[3] After subregulation
7.7.05B (2)
insert
(2A) For paragraph 942C (4) (b) of the Act,
the Financial Services Guide in relation to a financial service does not have
to include a statement setting out the name and contact details of a person if:
(a) the person is:
(i) a franchisee of the holder of an
Australian financial services licence (the franchisor) and a
corporate authorised representative of the franchisor; or
(ii) an employee of a franchisee of the
holder of an Australian financial services licence; and
(b) the franchisor is an authorised deposit‑taking
institution (within the meaning of the Banking Act 1959) and regulated
by APRA; and
(c) the franchise agreement:
(i) subjects the person to the
policies of the franchisor; and
(ii) requires compliance by the person
with the policies of the franchisor that were made to give effect to the franchisor’s
obligations under the Australian financial services licence; and
(d) the Financial Services Guide produced by the
franchisor explains that the franchisor takes responsibility for the services
provided by the person.
[4] After Division 2A of Part 7.7 of Chapter 7
insert
Division 2B Record of small investment advice
7.7.08C Record of small investment
advice — content requirements
(1) For subsection 946AA (4) of the Act, a
record of advice to a client must set out:
(a) the matters set out in
subregulation (2); and
(b) the information that, if a Statement of
Advice were to be given, would be required in that statement by
paragraphs 947B (2) (d) and (e) of the Act or
paragraphs 947C (2) (e) and (f) of the Act.
(2) For paragraph (1) (a), the matters that
the record of advice must set out are:
(a) brief particulars of the recommendations
made to the client and the basis on which the recommendations are made; and
(b) brief particulars of the information that
would be required by subsection 947D (2) of the Act if a Statement of
Advice were given to the client; and
(c) the statement that would be required by
subsection 947D (3) of the Act if a Statement of Advice were given to
the client.
Note A client is entitled to ask the
providing entity for a record of advice and the providing entity must give a
copy of the record of advice to the client — see
paragraph 946AA (5) (a) of the Act.
[5] After regulation 7.7.09
insert
7.7.09A Situations in which
Statement of Advice is not required: small investments threshold
(1) For
subparagraph 946AA (1) (a) (i) of the Act, the threshold
amount is $15 000.
(2) Subregulations (3) and (4) apply to each of
the following financial products:
(a) shares;
(b) rights issues;
(c) options over unissued shares;
(d) partly paid shares;
(e) debentures;
(f) stapled securities.
(3) For small investment advice to a client that is
related to the acquisition of one or more of the financial products listed in
paragraphs (2) (a) to (f), the threshold amount in
subregulation (1) must be calculated to include the total value of all
financial investments that would be committed to by the client if the advice were
accepted by the client.
Examples
1 If the small investment advice
related to the purchase of options over unissued shares the total cost of the
options would be both the cost to buy the options and the cost of the exercise
price on the face of the options.
2 If the small investment advice
relates to the purchase of partly paid shares the total cost of the shares must
be calculated as if all calls had been made on the shares.
Note The total value of all financial
investments in relation to which small investment advice is provided is
calculated in accordance with subsection 946AA (2) of the Act.
(4) For small investment advice to a client that is
related to the disposal of one or more of the financial products listed in
paragraphs (2) (a) to (f), the threshold amount in
subregulation (1) must be calculated to include the total value of all
financial investments that would be disposed of by the client if the advice were
accepted by the client.
Note The total value of all financial
investments in relation to which small investment advice is provided is
calculated in accordance with subsection 946AA (2) of the Act.
(5) Subregulations (6) and (7) apply to each of
the following financial products:
(a) superannuation;
(b) managed investment schemes;
(c) non‑derivative instalment warrants.
(6) For small investment advice to a client that is related
to the acquisition of one or more of the financial products listed in
paragraphs (5) (a) to (c), the threshold amount in
subregulation (1) must be calculated to include:
(a) both:
(i) the cost to the client of the
initial investment; and
(ii) other amounts that would be
committed to by the client if the advice is taken; and
(b) if the investment is not finite — the
value of the investment is calculated for the 12‑month period beginning
from the date that the record of advice is required by subregulation (10),
(11) or (12) to be given to the client.
Examples
1 Advice given in relation to
switching superannuation funds
A person earning $50 000 per annum is given advice to
switch an existing superannuation fund balance of $12 000 to another
superannuation fund and direct all future superannuation guarantee
contributions to that same fund. In this event the total of the superannuation
guarantee contributions in the first 12‑month period (ie $50 000 ×
0.09 = $4 500) when added to the initial $12 000 transfer, would
exceed the $15 000 threshold. In this example the exemption, in
section 946AA of the Act, from the requirement to provide a Statement of
Advice would not apply.
2 Advice given to acquire non‑derivative
instalment warrants
The terms of the non‑derivative instalment warrants
are that $10 000 must be paid initially, a second payment of $12 000
in 18 months time and a third and final payment of $12 000 in
3 years time. The investment advice, assuming the client has committed to
implementing the advice, concerns a $34 000 investment and therefore the
exemption, in section 946AA of the Act, from the requirement to provide a
Statement of Advice would not apply.
Note The total value of all financial
investments in relation to which small investment advice is provided is
calculated in accordance with subsection 946AA (2) of the Act.
(7) For small investment advice to a client that is
related to the disposal of one or more of the financial products listed in
paragraphs (5) (a) to (c), the threshold amount in
subregulation (1) must be calculated to include:
(a) the value to the client of the total
divestment; and
(b) other amounts reasonably related to the
divestment that would be expended if the advice is taken.
Note The total value of all financial
investments in relation to which small investment advice is provided is
calculated in accordance with subsection 946AA (2) of the Act.
(8) If the total value of an investment, to which
investment advice to a client relates, is not able to be ascertained under
subsection 946AA (2) of the Act, the investment advice is taken to
exceed the threshold amount in subregulation (1).
(9) If an investment, to which investment advice
relates, is jointly held by more than 1 client, the sum of the values of each client’s
investment must be calculated to determine whether the threshold amount in
subregulation (1) is exceeded.
When record of advice is given
(10) For subsection 946AA (4) of the Act, a
record of advice is required to be given to a client when, or as soon as
practicable after, investment advice is provided to the client and, in any
event, subject to subregulation (12), before the providing entity provides
the client with any further financial service that arises out of or in
connection with the investment advice.
Statement of certain information if record of advice not given
when advice provided
(11) If the record of advice is not given to the client
when the investment advice is provided, the providing entity must, at the time
the investment advice is provided, give the client a statement that contains
the information that would be required to be in a Statement of Advice by:
(a) paragraphs 947B (2) (d) and
(e) of the Act; or
(b) paragraphs 947C (2) (e) and
(f) of the Act;
as the case requires, and by section 947D of the Act, if
applicable.
Time‑critical cases
(12) If:
(a) a client expressly instructs that they
require a further financial service to be provided immediately, or by a
specified time; and
(b) the further financial service arises out of, or
in connection with, the investment advice given to the client; and
(c) it is not reasonably practicable to give a
record of advice to the client before the further service is provided as so
instructed;
the providing entity must give the client the record of advice:
(d) unless paragraph (e) applies —
within 5 days after providing the further service, or as soon as practicable;
or
(e) if the further financial service is the
provision to the client of a financial product and section 1019B of the
Act applies to the acquisition of the product by the client — before the
start of the period applicable under subsection 1019B (3) of the Act,
or sooner if practicable.
[6] After regulation 7.7.10AA
insert
7.7.10AAA Record of advice
without a recommendation to purchase or sell — content requirements
For subsection 946B (9) of the Act, a
record of advice must set out the following:
(a) the investment advice given to a client by
the providing entity;
(b) brief particulars of the recommendations made
to the client and the basis on which the recommendations are made;
(c) if the providing entity is a financial
services licensee — the information that, if a Statement of Advice were to
be given, would be required in that Statement by paragraphs 947B (2) (d)
and (e) of the Act;
(d) if the providing entity is an authorised
representative — the information that, if a Statement of Advice were to be
given, would be required in that Statement by
paragraphs 947C (2) (e) and (f) of the Act.
Note A client is entitled to ask the
providing entity for a record of advice under subsections 942B (8)
and 942C (8) of the Act.
[7] Subregulation 7.9.01 (1), definition of publication
date
omit
[8] Regulation 7.9.07K
substitute
7.9.07K Definition of defective:
Product Disclosure Statement, Short‑Form PDS or Replacement Product Disclosure
Statement
For paragraph 1020G (1) (c) of the Act,
Part 7.9 of the Act applies as if section 1022A of the Act were varied by omitting
paragraph (b) of the definition of defective in subsection (1)
and the following paragraph were inserted:
‘(b) if it is a Product Disclosure Statement, a
Short‑Form PDS or a Replacement Product Disclosure Statement —
either:
(i) it is not prepared in accordance
with section 1013A; or
(ii) there is an omission from the Product
Disclosure Statement, Short‑Form PDS or Replacement Product Disclosure
Statement of material required by section 1013C, other than material
required by section 1013B or 1013G; or’.
[9] Regulation 7.9.13A
omit
Schedule 2 Amendments
commencing on commencement of items 218 and 219 of Schedule 1 to the Corporations
Legislation Amendment (Simpler Regulatory System) Act 2007
(regulation 3)
[1] After Regulation 7.1.04C
insert
7.1.04CA Kinds of financial
products
(1) For section 761CA of the Act, this regulation
applies in relation to paragraph 917C (3) (ba) of the Act.
(2) The following are kinds of financial product:
(a) motor vehicle insurance;
(b) home building insurance;
(c) home contents insurance;
(d) sickness and accident insurance;
(e) consumer credit insurance;
(f) travel insurance.
[2] Subregulation 7.7.02 (2)
substitute
(2) For subsection 941C (4) of the Act:
(a) providing
general advice to the public, or a section of the public, at an event organised
by or for financial services licensees to which retail clients are invited is
prescribed; and
(b) a broadcast of general advice to the public,
or a section of the public, that may be viewed or heard by any person is prescribed;
and
(c) distributing or displaying promotional
material that:
(i) provides general advice to the
public, or a section of the public; and
(ii) is available in a place that is
accessible to the public is prescribed.
Examples
1 Television or radio broadcasts.
2 Distributing promotional material contained
in newspapers and magazines.
3 Sending a broadcast via an Internet website
or webcast.
4 Giving a public lecture or seminar for
retail clients, including employees of a workplace.
Note If general advice is given to the
public, or a section of the public, the requirements of subsection 941C (5)
of the Act must be complied with. Additionally, if general advice is provided
to 1 or more retail clients, the providing entity must comply with section 949A
of the Act.
Schedule 3 Amendment
commencing on 1 July 2008
(regulation 3)
[1] After Division 4C of Part 7.9
insert
Division 4D Other requirements relating to Product Disclosure Statements
and Supplementary Product Disclosure Statements
Subdivision 4D.1 Requirement to lodge a notice with ASIC
7.9.16T Variation of paragraph
1015D (2) (b) of the Act
For paragraph 1020G (1) (c) of the
Act, Part 7.9 of the Act applies as if paragraph 1015D (2) (b) of
the Act were omitted and the following paragraph and note were inserted:
‘(b) a change is made to the fees and charges set
out in the enhanced fee disclosure table in the Statement;
Note The templates for the enhanced fee
disclosure table are set out in items 201 and 202 of Schedule 10 to
the Corporations Regulations 2001.’.