Corporations Regulations 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

PART 7.8 - OTHER PROVISIONS RELATING TO CONDUCT ETC CONNECTED WITH FINANCIAL PRODUCTS AND FINANCIAL SERVICES, OTHER THAN FINANCIAL PRODUCT DISCLOSURE  

Division 2 - Dealing with clients ' money  

Subdivision A - Money other than loans  

REGULATION 7.8.01   OBLIGATION TO PAY MONEY INTO AN ACCOUNT  

7.8.01(1)   [ ADI paying money into account held by itself]  

For subparagraph 981B(1)(a)(i) of the Act, the reference in that subparagraph to an account with an Australian ADI does not prevent a financial services licensee that is an ADI from paying money into an account held by itself.

7.8.01(2)   [ Prescribed accounts]  

For subparagraph 981B(1)(a)(ii) of the Act, the following accounts are prescribed:

(a) an account with an approved foreign bank;

(b) a cash management trust.

7.8.01(3)   [ Losses made on investment]  

For subparagraph 981B(1)(b)(iv) of the Act, if, in accordance with an agreement mentioned in paragraph 7.8.02(3)(a) , a financial services licensee is required to pay an amount mentioned in subparagraph 7.8.02(3)(a)(iv) , that amount is money which must be paid into an account to which that subparagraph applies.

7.8.01(4)   [ Money paid by or on behalf of insured]  

For subparagraph 981B(1)(b)(iv) of the Act:

(a) money paid to a financial services licensee:

(i) from or on behalf or [ sic ] an insured or intending insured for or on account of an insurer; and

(ii) in connection with a contract of insurance or proposed contract of insurance;

is money which may be paid into an account to which that subparagraph applies; and

(b) money paid to a financial services licensee from or on behalf of an insurer for or on account of an insured or intending insured is money which may be paid into an account to which that subparagraph applies.

7.8.01(4A)   [ Requirement to pay in operating rules]  

For subparagraph 981B(1)(b)(iv) of the Act, if a financial services licensee is required, by the market integrity rules or the operating rules of a licensed market, to pay an amount into an account to which section 981B relates, the amount is money which may be paid into that account.

7.8.01(5)   [ Trust account]  

For paragraph 981B(1) (c) of the Act, a financial services licensee must:

(a) operate an account to which that paragraph applies as a trust account; and

(b) designate the account to be a trust account; and

(c) hold all moneys paid into the account (other than moneys paid to the financial services licensee under the financial services licensee's obligation to call margins from clients under the market integrity rules, the operating rules of a licensed market or the operating rules of a licensed CS facility) on trust for the benefit of the person who is entitled to the moneys.

7.8.01(6)   [ Payments for financial products prior to issue]  

For subparagraph 981B(1)(b)(iv) of the Act, money received under section 1017E of the Act is money which may be paid into:

(a) an account to which section 981B relates; or

(b) an insurance broking account maintained under section 26 of the Insurance (Agents and Brokers) Act 1984 .

7.8.01(7)   [ Additional requirements]  

For paragraph 981B(1)(c) of the Act, if money received under section 1017E of the Act is paid into an account under subregulation (6), Part 7.8 of the Act applies to the money.

Note: See also subregulation 7.9.08(3) .

7.8.01(8)   [ Margin calls]  

For paragraph 981B(1)(c) of the Act, if a financial services licensee is required to call margins from a client under the market integrity rules, the operating rules of a licensed market or the operating rules of a licensed CS facility:

(a) the financial services licensee may operate an account to which that paragraph applies as:

(i) a clients ' segregated account; or

(ii) a trust account;

in accordance with the operating rules or market integrity rules; and

(b) if:

(i) the account is operated outside Australia; and

(ii) the law in force in the jurisdiction where it is maintained requires the account to be designated in a particular way;

the financial services licensee must designate the account in that way.

Note: The operating rules or market integrity rules may require client moneys, including moneys used for margining, to be held in either a clients ' segregated account or a trust account.

7.8.01(9)   [ Money payable into account]  

For subparagraph 981B(1)(b)(iv) of the Act, if an account is operated in accordance with subregulation (8), all money received by the financial services licensee under Subdivision A of Division 2 of Part 7.8 of the Act is money that may be paid into that account.

7.8.01(10)   [ Operation of s 981E]  

Subregulation (8) does not affect the operation of section 981E of the Act.

7.8.01(11)   [ Mixed and unidentified money]  

For subparagraph 981B(1)(b)(iv) of the Act, each of the following is money that may be paid into an account:

(a) mixed money;

(b) unidentified money.

7.8.01(12)   [ Identify type of money]  

For paragraph 981B(1)(c) of the Act, if mixed money is paid into an account under subregulation (11), the licensee must, as soon as practicable, but within 1 month after the mixed money is paid into the account, remove from the account the part of the money that is not section 981B money.

7.8.01(13)   [ Remove non s 981B money]  

For paragraph 981B(1)(c) of the Act, if unidentified money is paid into an account under subregulation (11), the licensee must, as soon as practicable after the unidentified money is paid into the account:

(a) identify any part of the money that is section 981B money; and

(b) remove from the account any part of the money that is not section 981B money.

7.8.01(14)   [ " mixed money " , " section 981B money " , " unidentified money " ]  

For subregulations (11) to (13):

mixed money
means money that:

(a) is received by the licensee as a single payment; and

(b) is not wholly section 981B money, but includes section 981B money.

section 981B money
means:

(a) money to which Subdivision A of Division 2 of Part 7.8 of the Act applies; or

(b) money that is allowed to remain in the account because of the operation of subparagraphs 981B(1)(b)(ii) and (iii) of the Act; or

(c) money mentioned in subregulation (4).

unidentified money
means money that:

(a) is received by the licensee as a single payment; and

(b) at the time of receipt, is unable to be identified as section 981B money or mixed money; and

(c) might include section 981B money.