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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 4 - Other disclosure requirements    View history reference

SECTION 949A  GENERAL ADVICE PROVIDED TO RETAIL CLIENT - OBLIGATION TO WARN CLIENT THAT ADVICE DOES NOT TAKE ACCOUNT OF CLIENT'S OBJECTIVES, FINANCIAL SITUATION OR NEEDS  

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949A(1)  

This section applies in relation to the provision of general advice if:


(a) the advice is provided:


(i) by a financial services licensee (the providing entity); or

(ii) by an authorised representative (the providing entity) of a financial services licensee, or of 2 or more financial services licensees; and


(b) the advice is provided to a person (the client) as a retail client; and


(c) the advice is not provided in circumstances specified in regulations made for the purposes of this paragraph.
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949A(2)  

The providing entity must, in accordance with subsection (3), warn the client that:


(a) the advice has been prepared without taking account of the client's objectives, financial situation or needs; and


(b) because of that, the client should, before acting on the advice, consider the appropriateness of the advice, having regard to the client's objectives, financial situation and needs; and


(c) if the advice relates to the acquisition, or possible acquisition, of a particular financial product - the client should:

(i) if the product is not a CGS depository interest - obtain a Product Disclosure Statement (see Division 2 of Part 7.9) relating to the product and consider the Statement before making any decision about whether to acquire the product; or

(ii) if the product is a CGS depository interest - obtain each information statement (see Division 5C of Part 7.9) for the class of CGS depository interests that includes the product and consider the statement before making any decision about whether to acquire the product.
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Note: Failure to comply with this subsection is an offence (see subsection 1311(1)).

[CCH Note: For modified s 949A(2)(c), see Corporations Regulations Schedule 10BA - Modifications of the Act relating to short-form product disclosure statements, Part 1, item 1.1]

949A(3)  

The warning must be given to the client at the same time as the advice is provided and by the same means as the advice is provided.

949A(4)  

In any proceedings against an authorised representative of a financial services licensee for an offence based on subsection (1), it is a defence if:


(a) the licensee had provided the authorised representative with information or instructions about the requirements to be complied with in relation to the giving of personal advice; and


(b) the representative's failure to comply with subsection (1) occurred because the representative was acting in reliance on that information or those instructions; and


(c) the representative's reliance on that information or those instructions was reasonable.

Note: A defendant bears an evidential burden in relation to the matters in subsection (4). See subsection 13.3(3) of the Criminal Code.

949A(5)  

A financial services licensee must take reasonable steps to ensure that an authorised representative of the licensee complies with subsection (2).

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


 



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