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CORPORATIONS ACT 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS    View history reference

PART 7.7 - FINANCIAL SERVICES DISCLOSURE    View history reference

Division 3 - Additional requirements for personal advice provided to a retail client    View history reference

Subdivision C - Requirement for a Statement of Advice to be given    View history reference

SECTION 946B  OTHER SITUATIONS IN WHICH A STATEMENT OF ADVICE IS NOT REQUIRED  

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946B(1)  Further market-related advice.  

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The providing entity does not have to give the client a Statement of Advice for particular advice (the further market-related advice) if:


(a) the providing entity is a participant in a licensed market, or is an authorised representative of a participant in a licensed market; and


(b) the providing entity has previously given the client a Statement of Advice that set out the client's relevant personal circumstances in relation to the advice (the previous advice) set out in that Statement; and


(c) the further market-related advice recommends that the client:


(i) acquire or dispose of, or not acquire or dispose of; or

(ii) accept or refuse an offer or invitation which, if accepted, would result in the client acquiring or disposing of, or offering to acquire or dispose of;
securities, managed investment products or derivatives that are able to be traded on a licensed market; and


(d) the following conditions are satisfied:


(ia) the providing entity has, either immediately before the further market-related advice is given, or within the preceding 12 months, checked with the client whether the client's objectives, financial situation and needs have changed since the last time the providing entity checked with the client about those matters; and

(i) the client's relevant personal circumstances in relation to the further market-related advice (determined having regard to the client's objectives, financial situation and needs as currently known to the providing entity) are not significantly different from the client's relevant personal circumstances in relation to the previous advice; and

(ii) so far as the basis on which advice is given relates to other matters - the basis on which the further market-related advice is given is not significantly different from the basis on which the previous advice was given; and


(e) the providing entity has a reasonable belief that:


(i) the client requires the further market-related advice to be provided promptly; or

(ii) it is in the client's interests that the further market-related advice be provided promptly; and


(f) either:


(i) the further market-related advice does not contain any other kind of financial product advice; or

(ii) the only other kind of financial product advice contained in the further market-related advice is cash management facility advice; and


(g) the further market-related advice is given:


(i) by telephone; or

(ii) by fax; or

(iii) by e-mail; or

(iv) by another kind of electronic communication specified in regulations made for the purposes of this subparagraph.

Note: Paragraphs 947B(2)(b) and 947C(2)(b) require a Statement of Advice to include information about the basis on which the advice is or was given, which may include the client's relevant personal circumstances, in which case paragraph (b) of this subsection would be satisfied.

946B(2)  [Definitions]  

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For the purposes of subsection (1):

able to be traded on a licensed market means:


(a) in relation to securities or managed investment products - either:


(i) the securities or products are admitted to quotation on a licensed market and their admission to quotation is not suspended; or

(ii) the securities or products are not admitted to quotation on a licensed market, but are further securities or products of a kind that are already admitted to quotation on the market and whose admission to quotation is not suspended; and


(b) in relation to derivatives:


(i) the standard terms of the arrangement that constitutes the derivative are set out in the operating rules of a licensed market; and

(ii) under the operating rules of that market, the derivatives are able to be dealt with on the market.

cash management facility means:


(a) an interest in a registered scheme of a kind commonly known as a cash common fund or a cash management trust; or


(b) a basic deposit product; or


(c) a bank accepted bill.

cash management facility advice means advice about the use (but not the establishment) of a cash management facility in connection with an acquisition or disposal of securities, managed investment products or derivatives to which the further market-related advice relates.

946B(3)  [Information required to be given]  

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However, in the same communication as is used to provide the further market-related advice to the client, the client must be given the information that would, if a Statement of Advice were to be given, be required to be in the Statement by paragraphs 947B(2)(d) and (e), or 947C(2)(e) and (f), as the case requires.

946B(3A)  [Record required]  

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The providing entity must keep a record of the further market-related advice and, in doing so, must comply with any applicable requirements of regulations made for the purposes of this subsection.

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

Note 2: For the client's right to a record of the advice, see subsections 942B(8) and 942C(8).

[CCH Note: The next subsection is s 946B(5).]

946B(5)  Certain basic deposit and other products.  


The providing entity does not have to give the client a Statement of Advice if the advice relates to any or all of the following:


(a) a basic deposit product;


(b) a facility for making non-cash payments (see section 763D) that is related to a basic deposit product;


(c) a financial product of a kind prescribed by regulations made for the purposes of this paragraph.

946B(6)  [Where client not given Statement of Advice]  


However, if subsection (5) applies and the client is not given a Statement of Advice, the client must instead, when, or as soon as practicable after, the advice is provided, be given the information that would be required to be in the Statement of Advice by paragraphs 947B(2)(d) and (e), or 947C(2)(e) and (f), as the case requires.

946B(7)  Where advice does not recommend the purchase or sale of products.  

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The providing entity does not have to give the client a Statement of Advice for particular advice if:


(a) the advice does not recommend or state an opinion in respect of:


(i) the acquisition or disposal of any specific financial product, or the products of a specific issuer; nor

(ii) a modification to an investment strategy or a contribution level in relation to a financial product held by the client; and


(b) the following persons do not directly receive any remuneration (other than remuneration that is currently being received for an earlier acquisition of a product) or other benefit for, or in relation to, the advice:


(i) the providing entity;

(ii) an employer of the providing entity;

(iii) the authorising licensee, or any of the authorising licensees;

(iv) an employee or director of the authorising licensee, or of any of the authorising licensees;

(v) an associate of any of the above;

(vi) any other person prescribed by regulations made for the purposes of this paragraph.

946B(8)  [Information required to be given]  

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However, in the same communication as is used to provide to the client the advice referred to in subsection (7), the client must be given the information that would, if a Statement of Advice were to be given, be required to be in the Statement by paragraphs 947B(2)(d) and (e), or 947C(2)(e) and (f), as the case requires.

946B(9)  [Compliance with regulations]  

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The providing entity must keep a record of the advice and, in doing so, must comply with any applicable requirements of regulations made for the purposes of this subsection.

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

Note 2: For the client's right to a record of the advice, see subsections 942B(8) and 942C(8).


 



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