Financial Services Reform Act 2001 (122 of 2001)
Schedule 1 Financial Services and Markets
Part 1 Main amendments
Corporations Act 2001
1 Chapter 7 - Part 7.11 - Division 4
Division 4 - Transfer of financial products effected through prescribed CS facility
1074A Financial products to which this Division applies
This Division only applies in relation to particular financial products and a prescribed CS facility if regulations made for the purposes of this section provide that all financial products, or a class of financial products that includes the financial products, are financial products to which this Division applies in relation to the prescribed CS facility (whether or not they are also products to which this Division applies in relation to other prescribed CS facilities).
1074B Definitions
In this Division, unless the contrary intention appears:
transfer of a financial product has the meaning given by section 1073B.
transfer document for the transfer of a financial product has the meaning given by section 1073B.
1074C Operating rules of prescribed CS facility may deal with transfer of title
(1) The operating rules of a prescribed CS facility may deal with the transfer of financial products through the facility.
(2) Without limiting subsection (1), the operating rules of a prescribed CS facility may deal with the way in which a financial product may be transferred, including specifying:
(a) the financial products that may be transferred through the facility; and
(b) how financial products are transferred through the facility; and
(c) the person or body (if any) authorised to determine whether a transfer substantially complies with the operating rules of the facility.
(3) Nothing in subsection (1) or (2) confers a discretion to deal with a matter in the operating rules of a prescribed CS facility if there is an obligation under section 822A for that matter to be dealt with in those rules.
1074D Valid and effective transfer if operating rules complied with
(1) If a transfer of a financial product is effected:
(a) through a prescribed CS facility; and
(b) in accordance with the operating rules of the facility;
the transfer is valid and effective for the purposes of any law or instrument governing or relating to the way in which the financial product may be transferred.
(2) For the purposes of this section, the transfer of a financial product is taken to be, and always to have been, effected in accordance with the operating rules of a prescribed CS facility if the person or body authorised to do so under those rules determines that the transfer substantially complies with those rules.
1074E Regulations may govern transfer of financial products in accordance with operating rules of prescribed CS facility
Transfers that regulations may deal with
(1) The regulations may make provision in relation to transfers of financial products effected:
(a) through a prescribed CS facility; and
(b) in accordance with the operating rules of the facility.
Regulations may make provision in relation to the transfer of financial products
(2) The regulations may specify:
(a) the legal effect of a transfer of a financial product through the facility in accordance with its operating rules; and
(b) the rights, liabilities and obligations of a person in relation to the transfer of a financial product through the facility, including the rights, liabilities and obligations of:
(i) the transferor and transferee; and
(ii) any other person involved in the transfer; and
(c) the circumstances in which a person will be taken to be involved in the transfer of a financial product for the purposes of the regulations; and
(d) the circumstances in which a person is required not to register, or give effect to, a transfer through the facility; and
(e) the circumstances in which a person is required not to refuse or fail to register, or give effect to, a transfer through the facility; and
(f) the circumstances in which a transfer through the facility will be taken to have been made in accordance with the rules of a prescribed CS facility; and
(g) the circumstances in which a person will be taken to be the holder of a financial product for the purposes of:
(i) a meeting; or
(ii) paying or transferring money or property to a person because the person holds or held a financial product; or
(iii) issuing a financial product to a person because the person holds or held a financial product; or
(iv) conferring a right on a person because the person holds or held a financial product.
Rights and liabilities in relation to transfer
(3) Without limiting paragraph (2)(b), the regulations may provide that a person:
(a) is taken to have:
(i) agreed to do, to accept or to be bound by a particular thing; or
(ii) done a particular thing; or
(iii) given particular warranties; or
(iv) done particular things on behalf of another person; or
(b) is taken to be authorised to do particular things on behalf of another person (even if the person has died); or
(c) is taken to be bound by a particular act; or
(d) is liable to indemnify another person against particular loss or damage; or
(e) is entitled to assume a particular matter without inquiry.
Person involved in transfer
(4) Without limiting paragraph (2)(c), the regulations may provide for any of the following to be taken to be involved in a transfer of a financial product:
(a) a person who carries on a financial services business and who arranges for the transfer;
(b) a person who operates a financial market on which the financial product is sold;
(c) a person who operates a licensed CS facility through which the product is transferred;
(d) the issuer of the product;
(e) an associate of a person who is involved in the transfer.
The regulations may specify the circumstances in which a person will be taken to be an associate of another person for the purposes of the regulations.
Offences
(5) Without limiting subsection (2), the regulations may provide for offences in relation to:
(a) the lodgment of a transfer document or title document for a financial product with the issuer of the product; or
(b) the use of identifying codes in relation to transfers of financial products; or
(c) contraventions of the operating rules of a prescribed CS facility.
Civil liability
(6) The regulations may also:
(a) provide for the liability of a person who contravenes the operating rules of a prescribed CS facility to compensate a person for loss or damage the person suffers because of the conduct engaged in in contravention of those rules; and
(b) specify the period within which an action for compensation must be begun.
(7) The regulations do not affect a liability that a person has under any other law.
Jurisdiction
(8) The regulations may apply to conduct engaged in in this jurisdiction or elsewhere.
1074F Issuer protected from civil liability for person’s contravention of prescribed CS facility’s certificate cancellation rules
If:
(a) a person contravenes the certificate cancellation provisions of a prescribed CS facility in relation to the transfer of a particular financial product through the facility; and
(b) the issuer of the financial product is not involved in the contravention;
the issuer is not liable to an action or other proceeding for damages in relation to the person’s contravention.
1074G Operation of this Division and regulations made for its purposes
(1) This section deals with the effect of the provisions of:
(a) this Division; and
(b) the regulations made for the purposes of this Division.
(2) The provisions apply in relation to a transfer of financial products despite anything to the contrary in:
(a) this Act (other than this Division); or
(b) another law, or instrument, relating to the transfer of the financial products.
(3) Except as provided in the provisions, the provisions do not affect the terms and conditions on which financial products are sold.
(4) Nothing in the provisions (other than in regulations made for the purpose of paragraph 1074E(2)(e)) affects any right of the issuer of a financial product to refuse:
(a) to acknowledge or register a person as the holder of a financial product; or
(b) to issue a financial product to a person;
on a ground other than an objection to the form of document, or electronic message or other electronic communication, that is lodged with or sent to the issuer and purports to transfer the financial product to the person.
(5) The registration of a transfer, or the issue, of a financial product by means of a transfer effected in accordance with the operating rules of a prescribed CS facility does not breach any law, constitution, trust deed or other instrument relating to financial products.
(6) Nothing in the provisions (other than in regulations made for the purpose of paragraph 1074E(2)(d)) prevents or affects the use of:
(a) any other form of transfer of financial products; or
(b) any other mode of executing a document transferring financial products;
that is otherwise permitted by law.
(7) A transfer of a financial product by or to a trustee or legal representative may be effected by means of a transfer in accordance with the operating rules of a prescribed CS facility despite any law or the provisions of the instrument (if any) creating, or having effect in relation to, the trust or will under which the trustee or legal representative is appointed.
(8) In subsection (7):
legal representative means:
(a) the executor, original or by representation, of a will of a dead person; or
(b) the administrator of the estate of a dead person.