Commonwealth Consolidated Regulations

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Specific things that are not financial products: surety bonds

             (1)  This regulation applies to an arrangement between 2 persons ( person 1 and person 2 ) made in the following circumstances:

                     (a)  person 1 enters into the arrangement in order to meet a requirement of another arrangement between person 1 and a person other than person 2 ( person 3 );

                     (b)  under the arrangement, person 2 undertakes to make a payment to, or perform an obligation for the benefit of, person 3 in circumstances specified as part of the arrangement;

                     (c)  under the arrangement, person 1 is liable to person 2 for any payments made, or liabilities, costs or expenses incurred, by person 2 in making the payment to, or performing the obligation for the benefit of, person 3;

                     (d)  the arrangement does not constitute a financial product under section 764A of the Act, other than a derivative.

             (2)  For paragraph 765A(1)(y) of the Act, the arrangement is not a financial product.

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