Commonwealth Consolidated Regulations

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CORPORATIONS REGULATIONS 2001 - REG 7.7.09AA

Statement of Advice from financial services licensee

             (1)  For paragraph 947B(2)(g) of the Act, a Statement of Advice given by a financial services licensee in relation to a margin lending facility, or a margin lending facility whose limit is proposed to be increased, within the meaning of subsection 761EA(1) of the Act must include the following information:

                     (a)  whether the client has taken out a loan to fund the secured property or transferred securities contributed by the client for establishing the margin lending facility;

Note:          This is sometimes referred to as 'double gearing'.

                     (b)  if a loan to fund the secured property or transferred securities contributed by the client for establishing the margin lending facility has been taken out--whether the security for the loan includes the primary residential property of the client;

                     (c)  whether there is a guarantor for the margin lending facility, and, if so:

                              (i)  if the financial services licensee has the necessary information--a statement as to whether the guarantor has been appropriately informed of, and warned about, the risks and possible consequences of providing the guarantee; or

                             (ii)  if the financial services licensee does not have the necessary information--a statement that the financial services licensee does not have the information;

                     (d)  the amount of any other debt incurred by the client;

                     (e)  any other matter that ASIC has specified in a legislative instrument for subregulation (2).

             (2)  ASIC may specify in a legislative instrument any matter ASIC considers to be relevant for the purpose of establishing whether the margin lending facility, or the margin lending facility with the increased limit, is unsuitable for the client.



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