Commonwealth Consolidated Acts

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Reporting to clients affected by a reportable situation

Notifying an affected client of a reportable situation

             (1)  A financial services licensee must take reasonable steps to notify a person (the affected client ) of a reportable situation in accordance with this section if:

                     (a)  the licensee, or a representative of the licensee, provides or has provided personal advice to the affected client as a retail client in relation to a relevant financial product; and

                     (b)  there are reasonable grounds to believe that the reportable situation has arisen in relation to the licensee as mentioned in:

                              (i)  paragraph 912D(1)(a) (significant breach of a core obligation); or

                             (ii)  subsection 912D(2) (gross negligence or serious fraud); and

                     (c)  there are reasonable grounds to suspect that:

                              (i)  the affected client has suffered or will suffer loss or damage as a result of the reportable situation; and

                             (ii)  the affected client has a legally enforceable right to recover the loss or damage from the licensee.

Form and period for giving notice

             (2)  A notice under this section must:

                     (a)  be given in writing within 30 days after the financial services licensee first knows of, or is reckless with respect to, the circumstances mentioned in paragraphs (1)(a), (b) and (c); and

                     (b)  if ASIC has approved the form in which the notice must be given:

                              (i)  be in the approved form; and

                             (ii)  include the information, statements, explanations or other matters required by the form; and

                            (iii)  be accompanied by any other material required by the form.

Qualified privilege

             (3)  A financial services licensee has qualified privilege in relation to a notice given under this section.

             (4)  A financial services licensee who has qualified privilege under subsection (3) in respect of conduct is also not liable for any action based on breach of confidence in relation to that conduct.

Civil penalty provision

             (5)  A person contravenes this subsection if the person contravenes subsection (1).

Note:          This subsection is a civil penalty provision (see section 1317E).

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