CORPORATIONS ACT 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

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

Division 6 - Miscellaneous  

SECTION 1020B   PROHIBITION OF CERTAIN SHORT SALES OF SECURITIES, MANAGED INVESTMENT PRODUCTS, FOREIGN PASSPORT FUND PRODUCTS AND CERTAIN OTHER FINANCIAL PRODUCTS  

1020B(1)  


In this section and in Division 5B :

section 1020B products
means:


(a) securities; or


(b) managed investment products; or


(ba) foreign passport fund products; or


(c) financial products referred to in paragraph 764A(1) (j); or


(d) financial products of any other kind prescribed by regulations made for the purposes of this definition.

1020B(2)  
Subject to this section and the regulations, a person must only, in this jurisdiction, sell section 1020B products to a buyer if, at the time of the sale:


(a) the person has or, if the person is selling on behalf of another person, that other person has; or


(b) the person believes on reasonable grounds that the person has, or if the person is selling on behalf of another person, that other person has;

a presently exercisable and unconditional right to vest the products in the buyer.

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

1020B(3)  
For the purposes of subsection (2):


(a) a person who, at a particular time, has a presently exercisable and unconditional right to have section 1020B products vested in the person, or in accordance with the directions of the person, has at that time a presently exercisable and unconditional right to vest the products in another person; and


(b) a right of a person to vest section 1020B products in another person is not conditional merely because the products are subject to a security interest in favour of another person to secure the repayment of money.

1020B(4)  


Subsection (2) does not apply in relation to a sale of section 1020B products by a person who, before the time of sale, has entered into a contract to buy those products and who has a right to have those products vested in the person that is conditional only upon all or any of the following:


(a) payment of the consideration in respect of the purchase;


(b) the receipt by the person of a proper instrument of transfer in respect of the products;


(c) the receipt by the person of the documents that are, or are documents of title to, the products.

1020B(5)  
(Repealed by No 146 of 2008, s 3, Sch 2 [ 2].)

1020B(6)  
(Repealed by No 146 of 2008, s 3, Sch 2 [ 2].)

1020B(7)  
For the purposes of this section, a person who:


(a) purports to sell section 1020B products; or


(b) offers to sell section 1020B products; or


(c) holds himself, herself or itself out as entitled to sell section 1020B products; or


(d) instructs a financial services licensee to sell section 1020B products;

is taken to sell the products.


View surrounding sectionsView surrounding sectionsBack to top


This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.