Commonwealth Consolidated Acts

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Requirements for connected loans

             (1)  A loan offered by a body corporate or responsible entity, or an associated entity of a body corporate or responsible entity, in connection with an employee share scheme complies with this section if:

                     (a)  the loan is offered on the following terms:

                              (i)  that the loan has no interest or fees payable;

                             (ii)  that the rights of the body corporate, responsible entity or associated entity as against the ESS participant, in the event of default in payment of the loan, are wholly limited to forfeiture of the ESS interests acquired using the loan; and

                     (b)  the borrower is the ESS participant who will acquire ESS interests offered under the employee share scheme; and

                     (c)  the terms of the loan meet any requirements prescribed in the regulations for the purposes of this paragraph.

Additional requirement for unlisted bodies corporate

             (2)  However, if the offer is of ESS interests in a body corporate that is not included in the official list of a financial market covered by section 1100K, a loan does not comply with this section if it is offered or made by the body corporate to any ESS participant who, at the time the loan is offered or made (as the case may be), is a shareholder of the body corporate.

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