CORPORATIONS ACT 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

PART 7.1 - PRELIMINARY  

Division 2 - Definitions  

SECTION 761E   MEANING OF ISSUED , ISSUER , ACQUIRE AND PROVIDE IN RELATION TO FINANCIAL PRODUCTS  

761E(1)   General.  

This section defines when a financial product is issued to a person. It also defines who the issuer of a financial product is. If a financial product is issued to a person:


(a) the person acquires the product from the issuer; and


(b) the issuer provides the product to the person.

Note: Some financial products can also be acquired from, or provided by, someone other than the issuer (e.g. on secondary trading in financial products).

761E(2)   Issuing a financial product.  

Subject to this section, a financial product is issued to a person when it is first issued, granted or otherwise made available to a person.

761E(3)  


Subject to this section, a financial product specified in the table is issued to a person when the event specified for that product occurs:


[ Table]
[ Table]
When particular financial products are issued
Item Financial product Event
1 superannuation product the person becomes a member of the fund concerned
2 RSA product the account concerned is opened in the person's name
3 derivative the person enters into the legal relationship that constitutes the financial product
4 margin lending facility the person enters into the legal relationship that constitutes the margin lending facility, as the client under the facility

761E(3A)  
For the avoidance of doubt, none of the following are taken to give rise to the issue of a financial product to a person (the client ):


(a) the client making a further contribution to a superannuation fund of which the client is already a member;


(aa) an employer of the client making a further contribution, for the benefit of the client, to a superannuation fund of which the client is already a member;


(b) the client making a further deposit into an RSA maintained in the client's name;


(ba) (Repealed)


(c) the client making a further payment under a life insurance investment product;


(d) the client making a further deposit into a deposit product;


(e) the client engaging in conduct specified in regulations made for the purposes of this paragraph in relation to a financial product already held by the client.

761E(4)   Issuer of a financial product.  

Subject to this section, the issuer , in relation to a financial product issued to a person (the client ), is the person responsible for the obligations owed, under the terms of the facility that is the product:


(a) to, or to a person nominated by, the client; or


(b) if the product has been transferred from the client to another person and is now held by that person or another person to whom it has subsequently been transferred - to, or to a person nominated by, that person or that other person.

Note: For example, the issuer of a direct debit facility is the financial institution with which the account to be debited is held, rather than the persons to whom payments can be made using the facility.

761E(5)  
Subject to subsection (7), each person who is a party to a financial product that:


(a) is a derivative; and


(b) is not entered into, or acquired, on a financial market;

is taken to be an issuer of the product.

Note 1: Under paragraph (1)(a), each person who is a party to the derivative will also acquire the financial product at the time of its issue as specified in subsection (3).

Note 2: Although each party to the derivative is an issuer, whether any particular party has disclosure or other obligations under this Chapter will depend on the circumstances (e.g. whether the issue occurs in the course of a business of issuing financial products and whether any of the other parties is a retail client).

761E(6)  
Subject to subsection (7), the issuer of a financial product that:


(a) is a derivative; and


(b) is entered into, or acquired, on a financial market;

is taken to be:


(c) if the product is entered into, or acquired, on the market through an arrangement made by a financial services licensee acting on behalf of another person - the financial services licensee; or


(d) if the product is entered into, or acquired, on the market through an arrangement made by an authorised representative of a financial services licensee acting on behalf of another person (not being the licensee) - the financial services licensee; or


(e) if neither paragraph (c) nor (d) applies - the market operator.

761E(7)  
The regulations may make provision determining all or any of the following for the purposes of this Chapter:


(a) the meaning of issue (and/or related parts of speech, including issuer ) in relation to a class of financial products;


(b) the meaning of acquire (and/or related parts of speech) in relation to a class of financial products;


(c) the meaning of provide (and/or related parts of speech) in relation to a class of financial products.

Regulations made for the purposes of this subsection have effect despite anything else in this section.


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