Schedule 1 Amendments
(regulation 3)
[1] After regulation 7.7.20
insert
7.7.20A Extension of disclosure
requirements to wholesale clients dealing with certain unauthorised insurers
(1) For paragraph 949B (1) (e) of the Act, a
person must give a wholesale client the information set out in subregulation (3)
for a financial service provided by that person to the wholesale client if:
(a) the service relates to an insurance contract
specified in regulation 4C or 4D of the Insurance Regulations 2002 that
may be offered or issued by an unauthorised foreign insurer (within the meaning
of those Regulations) (the insurer); and
(b) either:
(i) the person would be required to
give a Statement of Advice if the service were provided to a retail client; or
(ii) the contract is offered or issued
to the wholesale client.
Note Failure to comply with this
subregulation is an offence punishable by a fine of up to 50 penalty units or
imprisonment for 1 year, or both — see section 1311 and item 272A of
Schedule 3 to the Corporations Act 2001.
(2) For paragraph 949B (1) (e) of the Act, a
person must give a wholesale client the information set out in subregulation (3)
for a financial service provided by that person to the wholesale client if:
(a) the service relates to the wholesale client dealing
with an entity (the insurer) specified in regulation 12 of the Insurance
Regulations 2002; and
(b) either:
(i) the person would be required to
give a Statement of Advice if the service were provided to a retail client; or
(ii) the insurer offers or issues a
financial product to the wholesale client.
Note Failure to comply with this
subregulation is an offence punishable by a fine of up to 50 penalty units or
imprisonment for 1 year, or both — see section 1311 and item 272A of Schedule
3 to the Corporations Act 2001.
(3) The information is:
(a) a statement that the insurer is not
authorised under the Insurance Act 1973 to conduct insurance business in
Australia; and
(b) a
statement that the insurer is not subject to the provisions of the Insurance
Act 1973, which establishes a system of financial supervision of general
insurers in Australia; and
(c) a statement that the wholesale client
should consider whether to obtain further information, including:
(i) the
country in which the insurer is incorporated, and whether the country has a
system of financial supervision of insurers; and
(ii) the paid up capital of the insurer;
and
(iii) which country’s laws will
determine disputes in relation to the financial product.
[2] Part 7.9, after Division 2B
insert
Division 2BA Product Disclosure Statement for discretionary mutual funds
7.9.07CA Extension of Product Disclosure Statement
requirements to wholesale clients
(1) For paragraph 949B (1) (e)
of the Act, a regulated person must give a wholesale client a Product
Disclosure Statement or a Supplementary Product Disclosure Statement for a
financial product if:
(a) the financial product is
offered or issued by a discretionary mutual fund (within the meaning given by subsections 5 (5) and (6) of the Financial
Sector (Collection of Data) Act 2001); and
(b) the regulated person would be required to
give the Statement if the product were offered or issued to a retail client.
(2) The Product Disclosure Statement or Supplementary
Product Disclosure Statement required to be given under this regulation must be
the same as that which would be given to a retail client.
Note Failure to comply with this
regulation is an offence punishable by a fine of up to 50 penalty units or imprisonment
for 1 year, or both — see section 1311 and item 272A of Schedule 3 to the Corporations
Act 2001.