Commonwealth Consolidated Regulations

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CORPORATIONS REGULATIONS 2001 - REG 7.7A.12D

Brokerage fees

  (1)   A monetary benefit is not conflicted remuneration if:

  (a)   the benefit consists of a percentage, of no more than 100%, of a brokerage fee that is given to a provider who is a trading participant of a prescribed financial market or the market known as the ASX24; and

  (b)   the provider, directly or indirectly, gives the benefit to a representative of the provider.

Note 1:   For prescribed financial market , see regulation   1.0.02A.

Note 2:   The ASX24 is the financial market operated by Australian Securities Exchange Limited that was formerly known as the Sydney Futures Exchange.

  (1A)   A monetary benefit is not conflicted remuneration if:

  (a)   the benefit is a fee paid between a financial services licensee that is a trading participant of a prescribed financial market and a financial services licensee that is not a trading participant in respect of dealings undertaken by a retail client through a specified service; and

  (b)   each of those trades is executed by the trading participant on behalf of the retail client; and

  (c)   the fee is a percentage, not exceeding 100%, of a brokerage fee paid directly or indirectly by the retail client; and

  (d)   no portion of the benefit is paid to a person other than the trading participant or the licensee that is not a trading participant.

  (2)   In this regulation:

"brokerage fee" means a fee that a retail client pays to a provider in relation to a transaction in which the provider, on behalf of the retail client, deals in a financial product that is traded on:

  (a)   a prescribed financial market; or

  (aa)   the market known as the ASX24; or

  (b)   a prescribed foreign financial market.

Note 1:   Regulations   7.7A.17 and 7.7A.18 relate to exemptions in relation to the charging of asset - based fees on borrowed amounts.

Note 2:   The ASX24 is the financial market operated by Australian Securities Exchange Limited that was formerly known as the Sydney Futures Exchange.

"prescribed foreign financial market" means a financial market that:

  (a)   has its principal place of business in a foreign country; and

  (b)   has been authorised by an authority in that country that is a signatory to the International Organization of Securities Commissions' Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information of May 2002.

"specified service" means a service which:

  (a)   is provided for retail clients under the name or brand name of:

  (i)   the financial services licensee that is not a trading participant; or

  (ii)   the trading participant and the financial services licensee that is not a trading participant; and

  (b)   relates to the dealing, on behalf of the retail client, in a financial product traded on:

  (i)   a prescribed financial market; or

  (ii)   a prescribed foreign financial market; and

  (c)   is provided in either or both of the following ways:

  (i)   by direct electronic access;

  (ii)   by telephone, but only if:

  (A)   direct electronic access is not available for a temporary period, or the retail client expresses a preference that the service be provided by telephone; and

  (B)   neither the trading participant nor the financial services licensee that is not a trading participant is to provide financial product advice to the retail client by telephone in relation to the dealing undertaken on the retail client's behalf; and

  (d)   is provided in circumstances in which neither the trading participant nor the financial services licensee that is not a trading participant provides personal advice to the retail client in relation to the dealing undertaken on the retail client's behalf.

"trading participant" of a prescribed financial market or the market known as the ASX24 means a person who:

  (a)   is a participant of the market admitted under the market's operating rules; and

  (b)   is allowed, under the market's operating rules, to deal in one or more of the financial products that are able to be traded on the market.

Note:   The ASX24 is the financial market operated by Australian Securities Exchange Limited that was formerly known as the Sydney Futures Exchange.


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