Corporations Regulations 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

PART 7.1 - PRELIMINARY  

Division 2 - Retail clients and wholesale clients  

REGULATION 7.1.27   RETAIL CLIENTS AND WHOLESALE CLIENTS: EFFECT OF WHOLESALE STATUS  

7.1.27(1)   [ When holder of financial product is a wholesale client]  

For subsection 761G(10) of the Act if, at any time, the holder of a financial product is a wholesale client in relation to the product because of paragraph 761G(7) (a) of the Act:

(a) the holder is taken, on and after that time, to be a wholesale client in relation to the product as between the holder and:

(i) the issuer of the product; or

(ii) if a related body corporate of the issuer of the product provides a custodial or depository service to the holder of the product in relation to the product - the related body corporate;

for the period during which the holder holds the product; and

(b) paragraph (a) applies whether or not the holder would, but for that paragraph, have otherwise been or become a retail client in relation to that product at some time.

7.1.27(2)   [ Liability of issuer where holder of financial product changes]  

For subsection 761G(10) of the Act, if:

(a) a person is a wholesale client in relation to the product because of paragraph 761G(7) (a) or paragraph (1)(a); and

(b) another person becomes a holder of the financial product; and

(c) the issuer did not know, and could not reasonably be expected to have known:

(i) whether another person had become the holder of the financial product; or

(ii) whether any subsequent holder of the financial product was a retail client or a wholesale client;

the issuer is taken not to be guilty of any offence, or to be liable under civil penalty or civil liability provisions under the Act, merely because the issuer has not treated any subsequent holder of that financial product as a retail client.