Corporations Act 2001
Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .
CCH note - modifying legislative instruments: The application of Pt 7.8 is affected by the following legislative instruments that commenced or were amended on or after 1 January 2022: the ASIC Corporations (Investor Directed Portfolio Services) Instrument 2023/669 (Div 8 only) (as amended by ASIC Corporations (Amendment) Instrument 2024/554).
For legislative instruments or class orders before 1 January 2022 that affect the application of Pt 7.8, please consult the legislative instruments or class orders directly. These are reproduced in the regulatory-resources section of the company-law practice area in CCH iKnowConnect.
CCH Note: Division 7 is modified by the ASIC Corporations (Incidental Retail Cover) Instrument 2022/716.
CCH Note: Section 991E is modified by the ASIC Corporations (Incidental Retail Cover) Instrument 2022/716.
Obligation to disclose if acting on own behalf
991E(1)
Subject to the regulations, a financial services licensee must not, either personally or through an authorised representative, enter into a financial product transaction on their own behalf: (a) that relates to a financial product that is able to be traded on a licensed market; and (b) that is with a person (the non-licensee ) who is not a financial services licensee or an authorised representative;
if:
(c) the licensee has not (in accordance with any applicable regulations made for the purposes of paragraph (2)(a)) disclosed to the non-licensee the fact that the licensee will be acting on their own behalf in the proposed dealing; or (d) the non-licensee has not (in accordance with any applicable regulations made for the purposes of paragraph (2)(b)) consented to the licensee so acting in the proposed dealing.If the licensee is acting through an authorised representative, the disclosure referred to in paragraph (c) may instead be given by the representative.
Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).
991E(2)
The regulations may deal with either or both of the following: (a) how a disclosure referred to in paragraph (1)(c) is to be made; (b) how a consent referred to in paragraph (1)(d) is to be given.
Obligation not to charge fee
991E(3)
If a financial services licensee, either personally or through an authorised representative, enters into a transaction of sale or purchase of financial products on their own behalf: (a) that relates to a financial product that is able to be traded on a licensed market; and (b) that is with a person (the non-licensee ) who is not a financial services licensee or an authorised representative;
the licensee must only charge the non-licensee a brokerage, commission or other fee in respect of the transaction if the charge is permitted by the regulations.
Note: Failure to comply with this subsection is an offence (see subsection 1311(1) ).
Person may rescind contract if section contravened
991E(4)
If subsection (1) or (3) is contravened in relation to a transaction (whether or not anyone is convicted of an offence in respect of the contravention), the non-licensee may, subject to subsection (5), rescind the contract effecting the transaction, unless the contract was for the purchase of financial products by the non-licensee and the non-licensee has disposed of those products.
991E(5)
The right under subsection (4) to rescind the contract: (a) can only be exercised during the period of 14 days starting on:
(i) unless subparagraph (ii) applies - the day on which the contract was entered into; or
(b) is to be exercised by notice in writing to the licensee.
(ii) if regulations made for the purposes of this subparagraph specify a later day - that later day; and
991E(6)
Nothing in subsections (4) and (5) affects any other right that a person has.
Regulations may require records to be kept in relation to transactions entered into by licensee on own behalf
991E(7)
The regulations may impose requirements for the keeping of records relating to financial products transactions entered into by a financial services licensee on their own behalf.
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