Corporations Amendment Regulation 2012 (No. 4) (170 of 2012)

Schedule 1   Amendment

[3]   After Part 7.7

insert

Part 7.7A Best interests obligations and remuneration

Note Regulations 7.7A.01 to 7.7A.09 are reserved for future use.

Division 3 Charging ongoing fees to clients

7.7A.10 Arrangements that are not ongoing fee arrangements

(1) This regulation is made for subsection 962A (5) of the Act.

(2) An arrangement mentioned in subsection 962A (1) or (2) is not an ongoing fee arrangement to the extent that the fee payable under the arrangement is a product fee.

(3) A product fee is a fee that the issuer of a financial product charges a retail client for the management and operation of a financial product issued to the client.

Example

A monthly account keeping fee charged by the provider of a basic deposit product.

7.7A.11 Fee disclosure statements: product fee

(1) This regulation is made for paragraph 962H (3) (a) of the Act.

(2) Information about a product fee mentioned in subregulation 7.7A.10 (3) is not required by subsection 962H (2) of the Act.

Division 4 Conflicted remuneration

7.7A.12 Monetary benefit given in certain circumstances not conflicted remuneration: prescribed benefit

(1) This regulation is made for paragraph 963B (1) (e) of the Act.

(2) A benefit given to a financial services licensee, or a representative of a financial services licensee, for advice that relates to an interest in a time-sharing scheme is a prescribed benefit.

Note Under subsection 963B (1) of the Act, if a monetary benefit is a prescribed benefit, the benefit is not conflicted remuneration.

7.7A.13 Non-monetary benefit given in certain circumstances not conflicted remuneration: prescribed amount

For subparagraph 963C (b) (i) of the Act, the amount is $300 for each financial services licensee, or each representative of a financial services licensee, who is the final recipient of a non-monetary benefit.

Note Under paragraph 963C (b) of the Act, if a non-monetary benefit is given to a financial services licensee, or a representative of a financial services licensee, who provides financial advice, is less than the prescribed amount and identical or similar benefits are not given on a frequent or regular basis, the benefit is not conflicted remuneration.

7.7A.14 Non-monetary benefit given in certain circumstances not conflicted remuneration: education or training course

(1) This regulation is made for subparagraph 963C (c) (iii) of the Act.

(2) This regulation sets out requirements if a non-monetary benefit to which subparagraphs 963C (c) (i) and (ii) of the Act apply is the provision of an education or training course to a financial services licensee, or a representative of a financial services licensee.

Note Under paragraph 963C (c) of the Act, if certain non-monetary benefits have a genuine education or training purpose, are relevant to the provision of financial product advice to retail clients and comply with the regulations, the benefits are not conflicted remuneration.

(3) Education or training activities for the professional development of the participants in the course must take up at least:

(a) 75% of the time spent on the course; or

(b) 6 hours a day;

whichever is the lesser.

(4) The participant, or the participant’s employer or licensee, must pay for the costs of:

(a) travel and accommodation relating to the course; and

(b) events and functions held in conjunction with the course.

Example

The cost of day trips or dinners.

(5) In this regulation:

education or training course includes a conference or seminar.

7.7A.15 Non-monetary benefit given in certain circumstances not conflicted remuneration: other education and training benefit

(1) This regulation is made for subparagraph 963C (c) (iii) of the Act.

(2) This regulation sets out a requirement if a non-monetary benefit to which subparagraphs 963C (c) (i) and (ii) of the Act apply is not the provision of an education or training course to which regulation 7.7A.13 applies.

Note Under paragraph 963C (c) of the Act, if certain non-monetary benefits have a genuine education or training purpose, are relevant to the provision of financial product advice to retail clients and comply with the regulations, the benefits are not conflicted remuneration.

(3) The dominant purpose of the non-monetary benefit must be education and training.