Commonwealth Consolidated Regulations

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Conduct that does not constitute dealing in a financial product

             (1)  For subsection 766C(7) of the Act, conduct is not taken to be dealing in a financial product if:

                     (a)  the conduct is of a kind:

                              (i)  mentioned in paragraph 766C(1)(a), (d) or (e) of the Act; or

                             (ii)  mentioned in paragraph 766C(1)(b) of the Act, where it is the issue of a beneficial interest in a financial product, that arises from conduct that would constitute providing a custodial or depository service but for the operation of regulation 7.1.40; and

                     (b)  the conduct is carried out by a person ( person 1 ) in relation to a product that person 1 holds on trust for, or on behalf of, another person ( person 2 ) and the holding of that financial product would not constitute the provision of a custodial or depository service because of paragraphs 7.1.40(a), (b), (c), (d), (g) and (i).

             (2)  Subregulation (1) does not apply to conduct carried out by person 1 in relation to a financial product that is held under a custodial arrangement as defined in section 1012IA of the Act unless:

                     (a)  person 2 is an associate of person 1; or

                     (b)  the financial product is held in the manner mentioned in paragraph 7.1.40(d).

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