Commonwealth Consolidated Regulations

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Wholesale client money

                   For the purposes of paragraph 981A(4)(a) of the Act, money paid as mentioned in subsection 981A(1) of the Act is exempt from Subdivision A of Division 2 of Part 7.8 of the Act at a time if:

                     (a)  at that time the licensee has the client's written agreement to the money being dealt with other than in accordance with that Subdivision; and

Note 1:    It is not necessary for the agreement to mention that Subdivision explicitly.

Note 2:    If the licensee obtains the agreement after the money is paid, that Subdivision ceases to apply to the money when the licensee obtains the agreement.

                     (b)  either:

                              (i)  the financial service referred to in subparagraph 981A(1)(a)(i) of the Act is or relates to a dealing in a derivative; or

                             (ii)  the financial product referred to in subparagraph 981A(1)(a)(ii) of the Act is a derivative; and

                     (c)  the entry into of the derivative was not or will not be cleared through a clearing and settlement facility; and

                     (d)  the financial service or product would have been provided to the client as a wholesale client if:

                              (i)  the service or product were provided to the client when the money was paid; and

                             (ii)  section 761GA of the Act (about sophisticated investors) did not apply.

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