CORPORATIONS ACT 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

PART 7.9 - FINANCIAL PRODUCT DISCLOSURE AND OTHER PROVISIONS RELATING TO ISSUE, SALE AND PURCHASE OF FINANCIAL PRODUCTS  

Division 6 - Miscellaneous  

SECTION 1020B   PROHIBITION OF CERTAIN SHORT SALES OF SECURITIES, MANAGED INVESTMENT PRODUCTS, FOREIGN PASSPORT FUND PRODUCTS AND CERTAIN OTHER FINANCIAL PRODUCTS  

1020B(1)  


In this section and in Division 5B :

section 1020B products
means:


(a) securities; or


(b) managed investment products; or


(ba) foreign passport fund products; or


(c) financial products referred to in paragraph 764A(1) (j); or


(d) financial products of any other kind prescribed by regulations made for the purposes of this definition.

1020B(2)  
Subject to this section and the regulations, a person must only, in this jurisdiction, sell section 1020B products to a buyer if, at the time of the sale:


(a) the person has or, if the person is selling on behalf of another person, that other person has; or


(b) the person believes on reasonable grounds that the person has, or if the person is selling on behalf of another person, that other person has;

a presently exercisable and unconditional right to vest the products in the buyer.

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

1020B(3)  
For the purposes of subsection (2):


(a) a person who, at a particular time, has a presently exercisable and unconditional right to have section 1020B products vested in the person, or in accordance with the directions of the person, has at that time a presently exercisable and unconditional right to vest the products in another person; and


(b) a right of a person to vest section 1020B products in another person is not conditional merely because the products are subject to a security interest in favour of another person to secure the repayment of money.

1020B(4)  


Subsection (2) does not apply in relation to a sale of section 1020B products by a person who, before the time of sale, has entered into a contract to buy those products and who has a right to have those products vested in the person that is conditional only upon all or any of the following:


(a) payment of the consideration in respect of the purchase;


(b) the receipt by the person of a proper instrument of transfer in respect of the products;


(c) the receipt by the person of the documents that are, or are documents of title to, the products.

1020B(5)  
(Repealed by No 146 of 2008, s 3, Sch 2 [ 2].)

1020B(6)  
(Repealed by No 146 of 2008, s 3, Sch 2 [ 2].)

1020B(7)  
For the purposes of this section, a person who:


(a) purports to sell section 1020B products; or


(b) offers to sell section 1020B products; or


(c) holds himself, herself or itself out as entitled to sell section 1020B products; or


(d) instructs a financial services licensee to sell section 1020B products;

is taken to sell the products.


 

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