Commonwealth Consolidated Acts

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Remedies for person acquiring financial product under defective Product Disclosure Document

  (1)   Subject to this section, if a financial product is issued or sold to a person (the client ) in contravention of section   1016E, the client has the right to return the product and to have the money they paid to acquire the product repaid. This is so even if the responsible person is being wound up.

  (2)   If the responsible person:

  (a)   is a body corporate; and

  (b)   does not repay the money as required by subsection   (1);

the directors of the responsible person are personally liable to repay the money.

  (3)   The right to return the product must be exercised by notifying the responsible person in one of the following ways:

  (a)   in writing; or

  (b)   electronically; or

  (c)   in any other way specified in the regulations.

Also, if the regulations require the client to comply with other requirements in order to exercise the right to return the product, those other requirements must be complied with.

  (4)   The right to return the product can only be exercised during the period of 1 month starting on the date of the issue or sale of the product to the client.

  (5)   On the exercise of the right to return the product:

  (a)   if the product is constituted by a legal relationship between the client and the issuer of the product--that relationship is, by force of this section, terminated with effect from that time without penalty to the client; and

  (b)   any contract for the acquisition of the product by the client is, by force of this section, terminated with effect from that time without penalty to the client.

  (6)   The regulations may provide for consequences and obligations (in addition to those provided for by subsection   (5)) to apply if the right to return a financial product is exercised.

  (7)   The regulations may do any or all of the following:

  (a)   provide that a specified subclass of financial products that would otherwise be covered by this section is excluded from this section;

  (b)   provide additional requirements to be satisfied before this section applies in relation to a class or subclass of financial products;

  (c)   provide that this section does not apply in relation to the provision of a financial product in specified circumstances.

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