Corporations Regulations 2001
CHAPTER 7
-
FINANCIAL SERVICES AND MARKETS
PART 7.8
-
OTHER PROVISIONS RELATING TO CONDUCT ETC CONNECTED WITH FINANCIAL PRODUCTS AND FINANCIAL SERVICES, OTHER THAN FINANCIAL PRODUCT DISCLOSURE
Division 4A
-
Special provisions relating to margin lending facilities
Subdivision A
-
Responsible lending conduct for margin lending facilities
REGULATION 7.8.08B
EXEMPTION FROM REQUIREMENT TO MAKE UNSUITABILITY ASSESSMENT
7.8.08B(1)
For paragraph 992C(1)(a) of the Act, a person is exempt from the requirement in paragraph 985E(1)(c) of the Act to make an assessment if the margin lending facility mentioned in paragraph 985E(1)(a) or (b) of the Act is a facility mentioned in subregulation (2) : (a) in respect of the full amount of the loan, including any interest, fees and charges; and (b) in relation to which the client has not taken out a loan to fund the secured property contributed by the client for establishing the margin lending facility.
7.8.08B(2)
For subregulation (1) , the facility is a standard margin lending facility under the terms of which: (a) the credit provided must be applied wholly:
View history note
Hide history note[ CCH Note: Pursuant to the Corporations Amendment Regulations 2001 (No 4) (SR 2001 No 319) effective 11 March 2002, Chapter 7 (Securities) comprising reg 7.1.01 - 7.15.01 and Chapter 8 (The futures industry) comprising reg 8.1.01 - 8.7.03 are replaced by a new Chapter 7 (Financial services and markets) comprising reg 7.1.01 - 7.12.01. As the subject matter of the new Chapter 7 relates to the new financial services reform regime, " inserted " has been used in the history notes for each provision, and all references to the former provisions have been removed.]
For paragraph 992C(1)(a) of the Act, a person is exempt from the requirement in paragraph 985E(1)(c) of the Act to make an assessment if the margin lending facility mentioned in paragraph 985E(1)(a) or (b) of the Act is a facility mentioned in subregulation (2) : (a) in respect of the full amount of the loan, including any interest, fees and charges; and (b) in relation to which the client has not taken out a loan to fund the secured property contributed by the client for establishing the margin lending facility.
7.8.08B(2)
For subregulation (1) , the facility is a standard margin lending facility under the terms of which: (a) the credit provided must be applied wholly:
(i) to acquire one or more marketable securities, or a beneficial interest in one or more marketable securities; or
(b) the secured property mentioned in paragraphs (c) and (d) of that subsection:
(ii) to repay another credit facility, under the terms of which the credit provided was applied wholly to acquire one or more marketable securities, or a beneficial interest in one or more marketable securities; and
(i) consists wholly of one or more marketable securities, or a beneficial interest in one or more marketable securities; or
(c) the liability of the client to the provider is limited to the rights relating to the secured property.
(ii) consists:
(A) partly of one or more marketable securities, or a beneficial interest in one or more marketable securities; and
(B) partly of cash given to the provider and held in trust for the client for the sole purpose of servicing obligations under the facility; and
This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.