Corporations Act 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .

PART 7.8A - DESIGN AND DISTRIBUTION REQUIREMENTS RELATING TO FINANCIAL PRODUCTS FOR RETAIL CLIENTS  

Division 2 - Target market determinations for financial products  

SECTION 994C   TARGET MARKET DETERMINATIONS TO BE REVIEWED  

Reviews of target market determinations

994C(1)  
A person who makes a target market determination may at any time:

(a)  review the determination; or

(b)  make a new target market determination in accordance with section 994B .

994C(2)  
A person contravenes this subsection if:

(a)  the person makes a target market determination for a financial product; and

(b)  the product is on offer for acquisition by issue, or for regulated sale, to retail clients at or after the end of the review period; and

(c)  the person did not complete a review of the determination during the review period.

Note 1: Contravention of this subsection is an offence (see subsection 1311(1) ).

Note 2: This subsection is also a civil penalty provision (see section 1317E ). For relief from liability to a civil penalty relating to this subsection, see section 1317S .

Distribution where target market determinations not appropriate: maker of determination

994C(3)  
If:

(a)  a person makes a target market determination for a financial product; and

(b)  the product is on offer for acquisition by issue, or for regulated sale, to retail clients at any time during a review period for the determination; and

(c)  the person knows that:


(i) a review trigger for the determination has occurred; or

(ii) an event or circumstance has occurred that would reasonably suggest that the determination is no longer appropriate;

then, from as soon as practicable, but no later than 10 business days, after the person first knew of the occurrence of the review trigger, event or circumstance, the person must not engage in retail product distribution conduct in relation to the product unless:

(d)  the person has reviewed the determination and, if the determination is no longer appropriate, made a new determination in accordance with section 994B ; or

(e)  the retail product distribution conduct is excluded conduct.

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

Note 2: In a prosecution for an offence, the defendant bears an evidential burden in relation to the matters in paragraphs (d) and (e) (see subsection 13.3(3) of the Criminal Code ).

994C(4)  
If:

(a)  a person makes a target market determination for a financial product; and

(b)  the product is on offer for acquisition by issue, or for regulated sale, to retail clients at any time during a review period for the determination; and

(c)  the person knows, or ought reasonably to know, that:


(i) a review trigger for the determination has occurred; or

(ii) an event or circumstance has occurred that would reasonably suggest that the determination is no longer appropriate;

then, from as soon as practicable, but no later than 10 business days, after the person first knew of the occurrence of the review trigger, event or circumstance, the person must not engage in retail product distribution conduct in relation to the product unless:

(d)  the person has reviewed the determination and, if the determination is no longer appropriate, made a new target market determination in accordance with section 994B ; or

(e)  the retail product distribution conduct is excluded conduct.

Note: This subsection is a civil penalty provision (see section 1317E ). For relief from liability to a civil penalty relating to this subsection, see section 1317S .

994C(5)  
If:

(a)  a person makes a target market determination for a financial product; and

(b)  the product is on offer for acquisition by issue, or for regulated sale, to retail clients at any time during a review period for the determination; and

(c)  the person knows that:


(i) a review trigger for the determination has occurred; or

(ii) an event or circumstance has occurred that would reasonably suggest that the determination is no longer appropriate;

the person must, as soon as practicable, but no later than 10 business days, after the person first knew of the occurrence of the review trigger, event or circumstance, take all reasonable steps to ensure that regulated persons who engage in retail product distribution conduct in relation to the product (or are expected to do so) are informed that they must not engage in retail product distribution conduct in relation to the product unless:

(d)  the determination has been reviewed since the review trigger, event or circumstance occurred and, if a new target market determination is required, it has been made; or

(e)  the retail product distribution conduct is excluded conduct.

Note 1: Contravention of this subsection is an offence (see subsection 1311(1) ).

Note 2: This subsection is also a civil penalty provision (see section 1317E ). For relief from liability to a civil penalty relating to this subsection, see section 1317S .

Distribution where target market determinations not appropriate: regulated persons

994C(6)  
If a regulated person in relation to a financial product knows that the person who made the target market determination for the product has taken steps referred to in subsection (5) , the regulated person must, as soon as practicable, but no later than 10 business days, after the regulated person first became aware that the steps had been taken, cease to engage in retail product distribution conduct in relation to the product unless:

(a)  the determination has been reviewed since a review trigger, event or circumstance mentioned in paragraph (5)(c) occurred and, if a new target market determination is required, it has been made; or

(b)  the regulated person:


(i) made all inquiries (if any) that were reasonable in the circumstances; and

(ii) after doing so, believed on reasonable grounds that the determination had been reviewed since a review trigger, event or circumstance mentioned in paragraph (5)(c) occurred and, if a new target market determination was required, it had been made; or

(c)  the retail product distribution conduct is excluded conduct.

Note 1: Contravention of this subsection is an offence (see subsection 1311(1) ).

Note 2: In a prosecution for an offence, the defendant bears an evidential burden in relation to the matters in paragraphs (a), (b) and (c) (see subsection 13.3(3) of the Criminal Code ).

994C(7)  
If a regulated person knows or ought reasonably to know that the person who made the target market determination for a financial product has taken steps referred to in subsection (5) , the regulated person must, as soon as practicable, but no later than 10 business days, after the regulated person first became aware or should have become aware that the steps had been taken, cease to engage in retail product distribution conduct in relation to the product unless:

(a)  the determination has been reviewed since a review trigger, event or circumstance mentioned in paragraph (5)(c) occurred and, if a new target market determination is required, it has been made; or

(b)  the regulated person:


(i) made all inquiries (if any) that were reasonable in the circumstances; and

(ii) after doing so, believed on reasonable grounds that the determination had been reviewed since a review trigger, event or circumstance mentioned in paragraph (5)(c) occurred and, if a new target market determination was required, it had been made; or

(c)  the retail product distribution conduct is excluded conduct.

Note: This subsection is a civil penalty provision (see section 1317E ). For relief from liability to a civil penalty relating to this subsection, see section 1317S .


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