Commonwealth Numbered Regulations

CORPORATIONS AMENDMENT REGULATION 2013 (NO. 4) (SLI NO 115 OF 2013) - SCHEDULE 1

Corporations Regulations 2001

1  Regulation 7.7A.12D (heading)

Omit " given to representatives ".

2  After subregulation 7.7A.12D(1)

Insert:

          (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.

3  Subregulation 7.7A.12D(2) (at the end of the definition of brokerage fee )

Add:

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

4  Subregulation 7.7A.12D(2)

Insert:

"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.

5  At the end of Division 4 of Part 7.7A

Add:

Subdivision 3 -- Asset-based fees on borrowed amounts

7.7A.17   Financial services licensees

                   For subsection 964D(4) of the Act, a circumstance in which subsections 964D(1) and (2) of the Act do not apply is that the asset-based fee being charged is a brokerage fee within the meaning of regulation 7.7A.12D.

7.7A.18   Authorised representatives

                   For subsection 964E(3) of the Act, a circumstance in which subsection 964E(1) of the Act does not apply is that the asset-based fee being charged is a brokerage fee within the meaning of regulation 7.7A.12D.