Commonwealth Consolidated Regulations

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CORPORATIONS REGULATIONS 2001 - REG 7.1.23

Retail clients and wholesale clients: price of non-cash payment financial products

             (1)  This regulation makes arrangements about the price for the provision of a non-cash payment financial product.

Note:          Under paragraph 761G(7)(a) of the Act, if a financial product is not, or a financial service provided to a person does not relate to, a general insurance product, a superannuation product or an RSA product, the financial product or financial service is provided to the person as a retail client unless the price for the provision of the financial product, or the value of the financial product to which the financial service relates, equals or exceeds the amount specified in regulations made for the purposes of that paragraph as being applicable in the circumstances.

                   In general, the 'price' of a product will be the amount that is paid to acquire or be issued with the financial product. The test for the price of the product in paragraph 761G(7)(a) of the Act will be determined at or before the time the client acquires, or is issued with, the financial product. If a client pays over $500 000 to acquire or be issued with the financial product, the client will be a wholesale client in respect of the product.

Price

             (2)  For paragraph 761G(7)(a) of the Act, the amount applicable in relation to a non-cash payment financial product is $500 000.

Working out price: general rule

             (3)  The price of a non-cash payment financial product:

                     (a)  is the amount that is paid or payable to acquire or purchase the non-cash payment financial product; and

                     (b)  does not include any amount paid for or in respect of the non-cash payment financial product following its issue or acquisition unless the issue or acquisition would not have taken place without an arrangement to pay the amount.

Note:          Additional amounts paid into a smart card or cheque account after its issue will not generally be regarded as part of the 'price' paid to acquire or purchase the financial product.

             (4)  For subregulation (3), in calculating any amount payable or paid to acquire or purchase the non-cash payment financial product:

                     (a)  include any amount paid or payable to cover:

                              (i)  fees or charges that are paid to the issuer or any other person that relates to the issue of the non-cash payment financial product; and

                             (ii)  fees or charges that are paid to the issuer or any other person that relates to the issue of the non-cash payment financial product; and

                     (b)  despite paragraph (a), disregard any amount of remuneration or other benefits paid or payable to a person for the provision of financial product advice or other related services provided directly to:

                              (i)  the client; or

                             (ii)  another person acting on behalf of the client.



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