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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