Corporations Regulations 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

PART 7.1 - PRELIMINARY  

Division 1 - General  

REGULATION 7.1.06   SPECIFIC THINGS THAT ARE NOT FINANCIAL PRODUCTS: CREDIT FACILITY  

7.1.06(1)    
For subparagraph 765A(1)(h)(i) of the Act, each of the following is a credit facility :

(a)    

the provision of credit:

(i) for any period; and

(ii) with or without prior agreement between the credit provider and the debtor; and

(iii) whether or not both credit and debit facilities are available; and

(iv) that is not a financial product mentioned in paragraph 763A(1)(a) of the Act; and

(v) that is not a security, a managed investment product, a foreign passport fund product, an investment life insurance product, a superannuation product or an RSA; and

(va) that is not a financial product mentioned in paragraph 764A(1)(ba) , or (j) of the Act; and

(vi) that is not a financial product mentioned in paragraph 764A(1)(i) of the Act, other than a product the whole or predominant purpose of which is, or is intended to be, the provision of credit;

(b)    a facility:

(i) known as a bill facility; and

(ii) under which a credit provider provides credit by accepting, drawing, discounting or indorsing a bill of exchange or promissory note;

(c)    the provision of credit by a pawnbroker in the ordinary course of a pawnbroker ' s business (being a business which is being lawfully conducted by the pawnbroker);

(d)    the provision of credit by the trustee of the estate of a deceased person by way of an advance to a beneficiary or prospective beneficiary of the estate;

(e)    the provision of credit by an employer, or a related body corporate of an employer, to an employee or former employee (whether or not it is provided to the employee or former employee with another person);

(f)    

a mortgage:

(i) that secures obligations under a credit contract (other than a lien or charge arising by operation of any law or by custom); and

(ii) that is not a financial product mentioned in paragraph 763A(1) (a) of the Act; and

(iii) that is not a security, a managed investment product, a foreign passport fund product, an investment life insurance product, a superannuation product or an RSA; and

(iiia) that is not a financial product mentioned in paragraph 764A(1)(ba) , or (j) of the Act; and

(iv) that is not a financial product mentioned in paragraph 764A(1)(i) of the Act, other than a product the whole or predominant purpose of which is, or is intended to be, the provision of credit;

(g)    a guarantee related to a mortgage mentioned in paragraph (f);

(h)    a guarantee of obligations under a credit contract.

7.1.06(2)    
The provision of consumer credit insurance that includes a contract of general insurance for the Insurance Contracts Act 1984 is not a credit facility.

7.1.06(2A)    

The following are not credit facilities:

(a)    

a litigation funding scheme mentioned in regulation 5C.11.01 ;

(b)    

a litigation funding arrangement mentioned in regulation 5C.11.01 .

7.1.06(2B)    
(Repealed by FRLI No F2020L00942, Sch 1[3] (effective 24 July 2020).)

7.1.06(3)    
In this regulation:

credit
means a contract, arrangement or understanding:

(a) under which:

(i) payment of a debt owed by one person (a debtor ) to another person (a credit provider ) is deferred; or

(ii) one person (a debtor ) incurs a deferred debt to another person (a credit provider ); and

(b) including any of the following:

(i) any form of financial accommodation;

(ii) a hire purchase agreement;

(iii) credit provided for the purchase of goods or services;

(iv) a contract, arrangement or understanding for the hire, lease or rental of goods or services, other than a contract, arrangement or understanding under which:

(A) full payment is made before or when the goods or services are provided; and

(B) for the hire, lease or rental of goods - an amount at least equal to the value of the goods is paid as a deposit in relation to the return of the goods;

(v) an article known as a credit card or charge card;

(vi) an article, other than a credit card or a charge card, intended to be used to obtain cash, goods or services;

(vii) an article, other than a credit card or a charge card, commonly issued to customers or prospective customers by persons who carry on business for the purpose of obtaining goods or services from those persons by way of a loan;

(viii) a liability in respect of redeemable preference shares;

(ix) a financial benefit arising from or as a result of a loan;

(x) assistance in obtaining a financial benefit arising from or as a result of a loan;

(xi) issuing, indorsing or otherwise dealing in a promissory note;

(xii) drawing, accepting, indorsing or otherwise dealing in a negotiable instrument (including a bill of exchange);

(xiii) granting or taking a lease over real or personal property;

(xiv) a letter of credit.