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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 1017F  CONFIRMING TRANSACTIONS  

 View history reference

1017F(1)  Transactions to which this section applies.  


This section applies in relation to a transaction involving a financial product if:


(a) a person (the holder ) acquired the product as a retail client; and


(b) the transaction is:


(i) the transaction by which the holder acquired the product; or

(ii) a transaction that occurs while the holder holds the product, including a transaction by which the holder disposes of all or part of the product (and see also subsection (3)); and


(c) the transaction is not one that does not require confirmation because of subsection (4); and


(d) the holder has not, in accordance with regulations made for the purposes of paragraph (9)(d), waived their right to be provided with confirmation of the transaction; and


(e) either:


(i) the financial product was offered to, or acquired by, the holder in this jurisdiction; or

(ii) the transaction takes place in this jurisdiction.

Note: This section extends to financial products that are securities (see section 1010A ).

1017F(2)  Obligation to confirm transactions.  


The person (the responsible person ) specified in column 3 of an item in the following table must provide the holder with confirmation of the transaction specified in column 2 of the same item. The confirmation must be provided in accordance with subsections (5) to (8).

[ Table]

Who bears the obligation to confirm a transaction
ItemTransactionWhose obligation?
  1transaction by which the holder acquired the financial product, unless that transaction was a sale pursuant to an offer to which section 1012C appliesthe issuer of the product
  2transaction by which the holder acquired the financial product, where that transaction was a sale pursuant to an offer to which section 1012C appliesthe seller of the product
  3any other transaction in relation to the financial product that occurs while the holder holds the product, other than a disposal of all or part of the productthe issuer of the product
  4transaction by which the holder disposes of all or part of the financial productthe person specified in the regulations made for the purposes of this item

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

1017F(3)  Examples of transactions that are covered by subparagraph (1)(b)(ii).  


Without limiting the generality of subparagraph (1)(b)(ii), the transactions that are covered by that subparagraph include:


(a) varying the terms of the financial product while the holder holds the product (unless subsection (4) provides that the variation does not require confirmation); and


(b) the redemption or surrender of the financial product from or by the holder.

1017F(4)  Transactions that do not require confirmation.  


The following transactions do not require confirmation:


(a) a transaction consisting solely of an additional contribution towards the financial product in either of the following circumstances:


(i) the timing and amount, or method of calculating the amount, of the additional contribution was agreed on when the product was acquired by the holder;

(ii) the additional contribution is an amount that is payable under the terms of the product because of an increase in an external factor, such as a person's salary, an inflation index or a rate of a tax or levy;


(b) if the financial product is a security - a transaction consisting solely of a variation of the rights attaching to the security;


(c) if the financial product is a deposit product - any of the following transactions:


(i) a withdrawal from the deposit product pursuant to a cheque drawn on the account;

(ii) a deposit to, or withdrawal from, the deposit product under a direct credit arrangement or a direct debit arrangement;

(iii) crediting interest to the deposit product;

(iv) debiting the deposit product for fees or charges in respect of the product or transactions involving the product;

(v) debiting the deposit product for charges or duties on deposits into, or withdrawals from, the product that are payable under a law of the Commonwealth or of a State or Territory;

(vi) a transaction of a kind specified in regulations made for the purposes of this subparagraph;


(d) a variation of the terms of all financial products in the class to which the financial product belongs;


(e) a transaction of a kind specified in regulations made for the purposes of this paragraph.

Note 1: Because of subparagraph (a)(i), confirmation is not required, e.g., for regular monthly contributions to a superannuation fund.

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

1017F(5)  Confirmation may be provided on a transaction-by-transaction basis or by means of a standing facility.  


Confirmation of a transaction must be provided:


(a) by confirming the transaction in accordance with subsections (6) to (8), to the holder as soon as is reasonably practicable after the transaction occurs; or


(b) subject to subsection (5A), by providing the holder with access to a facility through which they can, for themselves, get a confirmation of the transaction in accordance with subsections (6) to (8) as soon as is reasonably practicable after the transaction occurs.

An arrangement under which the holder may request or require another person to provide a confirmation does not count as a facility that satisfies paragraph (b).

1017F(5A)  When confirmation may be provided by means of a standing facility.  


Confirmation may only be provided by means of a facility as mentioned in paragraph (5)(b) if:


(a) the holder concerned has agreed that confirmation of transactions involving the product may be provided by means of the facility; or


(b) the holder concerned:


(i) has, in accordance with the applicable requirements (if any) in regulations made for the purposes of this subparagraph, been informed, by or on behalf of the responsible person, about the facility and its availability to the holder as a means of obtaining confirmation of transactions involving the product; and

(ii) has not advised the responsible person that the holder does not agree to use the facility as a means of obtaining such confirmations.

[ CCH Note: For s 1017F(5B) and (5C), see Corporations Regulations Schedule 10A, Part 15 - Modifications for confirmation of transactions, item 15.1]

1017F(6)  Means of confirmation.  


The confirmation of the transaction:


(a) must be:


(i) in writing; or

(ii) electronic; or

(iii) in some other form applicable under regulations made for the purposes of this paragraph; and


(b) may be provided:


(i) in a case to which paragraph (5)(a) applies - directly by the responsible person or through another person (such as a financial services licensee); or

(ii) in a case to which paragraph (5)(b) applies - through a facility provided directly by the responsible person, or provided on behalf of the responsible person by someone else.

1017F(7)  Content of confirmation.  


The confirmation of the transaction must give the holder the information that the responsible person reasonably believes the holder needs (having regard to the information the holder has received before the transaction) to understand the nature of the transaction.

1017F(8)  [ Mandatory requirements]  


Without limiting subsection (7), the confirmation of the transaction must:


(a) identify the issuer and the holder; and


(b) if required to be given by a person other than the issuer - identify that person; and


(c) give details of the transaction, including:


(i) the date of the transaction; and

(ii) a description of the transaction; and

(iii) subject to regulations made for the purposes of this subparagraph - any amount paid or payable by the holder in relation to the transaction; and

(iv) subject to any regulations made for the purposes of this subparagraph - any taxes and stamp duties payable in relation to the transaction; and


(d) give any other details prescribed by regulations made for the purposes of this paragraph.

1017F(9)  Regulations may provide for modification or waiver of confirmation obligation.  


The regulations may do all or any of the following:


(a) modify subsection (2) to change the person required to provide confirmation of a transaction;


(b) modify subsections (5) and (6) to expand on or change the way in which confirmation of a transaction must be provided in particular circumstances;


(c) modify subsections (7) and (8) to expand on or change the information that must be included in the confirmation of a transaction in particular circumstances;


(d) specify the circumstances in which a person may waive the right to be provided with confirmation of a transaction, and specify how such a waiver may be made.


 



This information is provided by CCH Australia Limited. View the disclaimer and notice of copyright.
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