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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 3 - Other disclosure obligations of the issuer of a financial product    View history reference

SECTION 1017B  ONGOING DISCLOSURE OF MATERIAL CHANGES AND SIGNIFICANT EVENTS  

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1017B(1)  Issuer to notify holders of changes and events.  

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If:


(a) a person (the holder) acquired a financial product as a retail client (whether or not it was acquired from the issuer); and


(b) either:


(i) the financial product was offered in this jurisdiction; or

(ii) the holder applied for the financial product in this jurisdiction; and


(c) the product is not specified in regulations made for the purposes of this paragraph; and


(d) the circumstances in which the product was acquired are not specified in regulations made for the purposes of this paragraph;

the issuer must, in accordance with subsections (3) to (8), notify the holder of changes and events referred to in subsection (1A).

Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).

1017B(1A)  The changes and events that must be notified.  

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The changes and events that must be notified are:


(a) any material change to a matter, or significant event that affects a matter, being a matter that would have been required to be specified in a Product Disclosure Statement for the financial product prepared on the day before the change or event occurs; and


(b) any other change, event or other matter of a kind specified in regulations made for the purposes of this paragraph; and


(c) without limiting paragraph (a) or (b) - any replacement of a kind specified in regulations made for the purposes of this paragraph of a beneficial interest of a class that is a MySuper product with a beneficial interest of another class in a superannuation entity.
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Note: Paragraph (a) applies whether or not a Product Disclosure Statement for the financial product was in fact prepared (or required to be prepared) on the day before the change or event occurs.

1017B(2)  

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The issuer does not need to give the notice if the financial product is a managed investment product that is an ED security.

Note 1: The continuous disclosure provisions in Chapter 6CA (sections 674-677) apply to managed investment products that are ED securities.

Note 2: A defendant bears an evidential burden in relation to the matters in this subsection.

1017B(3)  

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The issuer must notify the holder in one of the following ways:


(a) in writing; or


(b) electronically; or


(c) in a way specified in the regulations.

1017B(4)  

The notice must give the holder the information that is reasonably necessary for the holder to understand the nature and effect of the change or event.

1017B(5)  Time for notifying holders.  

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The time within which the issuer must give the notice is set out in the following table:
Time for giving notice of change or event
 Nature of change or eventTime for giving notice
1Change or event is not an increase in fees or chargesSubject to subsection (6), before the change or event occurs or as soon as practicable after, but not more than 3 months after, the change or event occurs
2Change is an increase in fees or charges30 days before the change takes effect

[CCH Note: For s 1017B(5A)-(5E), see Corporations Regulations Schedule 10A, Part 10 - Modifications relating to ongoing disclosure of material changes and significant events in relation to superannuation products and RSAs, item 10.1]

1017B(6)  

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If the change or event is not an increase in fees or charges, the notice may be given more than 3 months after the change or event occurs if:


(a) the issuer reasonably believes that the event is not adverse to the holder's interests and accordingly the holder would not be expected to be concerned about the delay in receiving the information; and


(b) the notice is given no later than 12 months after the change or event occurs.

1017B(7)  

If the change or event might result in an increase in fees or charges, this section applies to the change or event as if it would result in an increase in fees or charges.

[CCH Note: For s 1017B(7A)-(7C), see Corporations Regulations Schedule 10A, Part 14 - Modifications relating to obligation to give information about financial products, item 14.1]

1017B(8)  

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In any proceedings against the issuer for an offence based on subsection (1), it is a defence if the issuer took reasonable steps to ensure that the other person would be notified of the matters required by subsection (1) in accordance with subsections (3) to (8).

Note: A defendant bears an evidential burden in relation to the matters in subsection (8). See subsection 13.3(3) of the Criminal Code.

1017B(9)  

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In this section:

fees or charges does not include fees or charges payable under a law of the Commonwealth or of a State or Territory.

MySuper product has the same meaning as in the Superannuation Industry (Supervision) Act 1993.

[CCH Note: For s 1017B(10), see Corporations Regulations Schedule 10A, Part 10 - Modifications relating to ongoing disclosure of material changes and significant events in relation to superannuation products and RSAs, item 10.2]


 



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