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CORPORATIONS ACT 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS    View history reference

PART 7.9 - FINANCIAL PRODUCT DISCLOSURE AND OTHER PROVISIONS RELATING TO ISSUE, SALE AND PURCHASE OF FINANCIAL PRODUCTS    View history reference

Division 2 - Product Disclosure Statements    View history reference

Subdivision B - Requirement for a Product Disclosure Statement to be given    View history reference

SECTION 1012IA  TREATMENT OF ARRANGEMENTS UNDER WHICH A PERSON CAN INSTRUCT ANOTHER PERSON TO ACQUIRE A FINANCIAL PRODUCT  

 View history reference

1012IA(1)  Definitions.  


In this section:

acquirer , in relation to a custodial arrangement, has the meaning given by the definition of custodial arrangement.

client , in relation to a custodial arrangement, has the meaning given by the definition of custodial arrangement.

custodial arrangement means an arrangement between a person (the provider) and another person (the client) (whether or not there are also other parties to the arrangement) under which:


(a) the client is, or is entitled, to give an instruction that a particular financial product, or a financial product of a particular kind, is to be acquired; and


(b) if the client gives such an instruction, a person (the acquirer), being the provider or a person with whom the provider has or will have an arrangement, must (subject to any discretion they have to refuse) acquire the financial product, or a financial product of that kind; and


(c) if the acquirer acquires the financial product, or a financial product of that kind, pursuant to an instruction given by the client, either:


(i) the product is to be held on trust for the client or another person nominated by the client; or

(ii) the client, or another person nominated by the client, is to have rights or benefits in relation to the product or a beneficial interest in the product, or in relation to, or calculated by reference to, dividends or other benefits derived from the product.

instruction includes a direction or request.

provider , in relation to a custodial arrangement, has the meaning given by the definition of custodial arrangement.

regulated acquisition means an acquisition of a financial product pursuant to an instruction by the client under a custodial arrangement, being an acquisition:


(a) by way of issue by the issuer (the regulated person); or


(b) pursuant to a sale by a person (the regulated person) in circumstances described in subsection 1012C(5), (6) or (8).

[CCH Note: For s 1012IA(1) (substituted definition of regulated acquisition), see Corporations Regulations Schedule 10A, Part 19 - Modifications for carbon units, Australian carbon credit units and eligible international emissions units, item 19.5]

regulated person , in relation to a regulated acquisition of a financial product, has the meaning given by paragraph (a) or (b) (as the case requires) of the definition of regulated acquisition.

1012IA(2)  Obligation on provider to give client a PDS.  


Before a regulated acquisition of a financial product occurs pursuant to an instruction given by the client under a custodial arrangement, the provider must give the client a Product Disclosure Statement for the product if a Product Disclosure Statement for the product would, if there were an equivalent direct acquisition by the client, be required by subsection 1012B(3) or 1012C(3) (see subsection (3) of this section) to be given to the client by the regulated person before that acquisition occurred. For this purpose, an equivalent direct acquisition is an acquisition that would occur if:


(a) the product were instead being offered for issue or sale direct to the client by the regulated person for the same price (or for the appropriate proportion of that price, if the transaction for the regulated acquisition also covers other products); and


(b) the circumstances of that issue or sale to the client were otherwise the same as those in which the regulated acquisition will occur.

[CCH Note: For modified s 1012IA(2), see Corporations Regulations Schedule 10A, Part 19 - Modifications for carbon units, Australian carbon credit units and eligible international emissions units, items 19.6 and 19.7]

1012IA(3)  Determining whether a PDS would have to be given for an equivalent direct acquisition.  


The following provisions apply for the purpose of determining whether the regulated person would be required by subsection 1012B(3) or 1012C(3) to give the client a Product Disclosure Statement for the financial product:


(a) the effect of the provisions referred to in subsection 1012B(5) or 1012C(10), as the case requires, as they have effect subject to the following paragraphs, must be taken into account;


(b) subsections 1012D(1), (2) and (2A) apply as if references in those subsections to the regulated person's belief in relation to a matter were instead references to the provider's belief in relation to that matter;
 View history reference


(c) subsections 1012D(2) and (3) apply as if references to the client already holding a financial product of the same kind also included a reference to a person already holding a financial product of the same kind as a result of an instruction given by the client under a custodial arrangement;


(d) sections 1012E and 1012F are to be disregarded;


(e) section 1012G has effect in accordance with subsection (4).

[CCH Note: For modified s 1012IA(3), see Corporations Regulations Schedule 10A, Part 19 - Modifications for carbon units, Australian carbon credit units and eligible international emissions units, items 19.8 and 19.9]

1012IA(4)  Modification of section 1012G.  


The following provisions apply in relation to section 1012G:


(a) in determining for the purposes of subsection (2) whether the regulated person would be required by subsection 1012B(3) or 1012C(3) to give the client a Product Disclosure Statement for the financial product, subsection 1012G(2) applies as if the reference to the client instructing the regulated person (in an issue situation) that they require the financial product to be provided or issued immediately, or by a specified time, were instead a reference to the client instructing the provider that they require the financial product to be acquired immediately, or by a specified time;


(b) if, because of subsection 1012G(2) as it applies because of paragraph (a) of this subsection, the provider does not have to give the client a Product Disclosure Statement for a financial product before a regulated acquisition of the financial product occurs pursuant to an instruction given by the client under a custodial arrangement:


(i) subsection 1012G(2) applies in relation to the provider, the client and the regulated acquisition as if the obligation it imposes to comply with subsection 1012G(3) were imposed on the provider; and

(ii) subsection 1012G(3) applies in relation to the provider, the client and the regulated acquisition as if the reference to the regulated person were instead a reference to the provider, as if subparagraph 1012G(3)(b)(i) were omitted and as if the reference in subparagraph 1012G(3)(b)(ii) to the day on which the financial product was issued or sold to the client were instead a reference to the day on which the regulated acquisition occurs.

1012IA(5)  Modification of section 1013A.  


Section 1013A applies in relation to a regulated acquisition as if:


(a) paragraph 1013A(1)(b) also covered a Product Disclosure Statement that is required to be given by subsection (2) of this section in relation to an acquisition covered by paragraph (a) of the definition of regulated acquisition in subsection (1) of this section; and


(b) paragraph 1013A(2)(b) also covered a Product Disclosure Statement that is required to be given by subsection (2) of this section in relation to an acquisition covered by paragraph (b) of the definition of regulated acquisition in subsection (1) of this section.

1012IA(6)  Provider is not an agent for the purposes of section 1015C.  


For the purposes of the application of section 1015C in relation to a regulated acquisition, the provider in relation to the relevant custodial arrangement is taken not to be an agent of the client.

1012IA(7)  Provider is covered by sections 1015E, 1021F and 1021I.  


Sections 1015E, 1021F and 1021I apply in relation to a regulated acquisition as if the references to a regulated person were instead references to the provider in relation to the relevant custodial arrangement.

1012IA(8)  Regulations may provide for other modifications.  


The regulations may provide for other modifications of provisions of this Part that are to have effect in relation to regulated acquisitions.


 



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