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 3 - Dealing with other property of clients  

REGULATION 7.8.07   HOW PROPERTY TO WHICH DIVISION 3 OF PART 7.8 OF THE ACT TO BE DEALT WITH  

7.8.07(1)    
For paragraph 984B(1) (a) of the Act, this regulation sets out requirements in relation to property to which Division 3 of Part 7.8 of the Act applies.

7.8.07(2)    
The financial services licensee must hold the property on trust for the benefit of the person who is entitled to it.

7.8.07(3)    
If the client requests the financial services licensee, in writing, to deposit the property in safe custody with an ADI:

(a)    the licensee must deposit the property; or

(b)    if the licensee does not comply with the request for any reason, the licensee must notify the client, as soon as practicable, of the failure to comply with the request.

7.8.07(4)    

If the client requests the financial services licensee, in writing, to deposit the property in safe custody with a financial services licensee that provides a custodial or depositary service:

(a)    the licensee must deposit the property; or

(b)    if the licensee does not comply with the request for any reason, the licensee must notify the client, as soon as practicable, of the failure to comply with the request.

7.8.07(5)    
If the client requests the financial services licensee, in writing, to deposit the property in safe custody in the place where the property was deposited with, or received by, the licensee:

(a)    the licensee must deposit the property in accordance with the request; and

(b)    if the licensee does not comply with the request for any reason, the licensee must notify the client, as soon as practicable, of the failure to comply with the request.

7.8.07(6)    

If the client requests that the body corporate that issued or made available the securities, managed investment products or foreign passport fund products underlying the property register the property in the name of a nominee controlled by the financial services licensee, the financial services licensee must arrange for the body corporate to register the securities, managed investment products or foreign passport fund products in that way.

7.8.07(7)    
If:

(a)    none of subsections (3) to (6) applies; and

(b)    the property is not registered in the client's name by the body corporate that issued or made available the securities, managed investment products or foreign passport fund products underlying the property;

the financial services licensee must arrange to have the property registered in the client's name.

7.8.07(8)    
A financial services licensee must not deposit property as security for a loan or advance to the financial services licensee unless:

(a)    the client owes the financial services licensee an amount in connection with a transaction entered into by the financial services licensee on the client's behalf; and

(b)    the financial services licensee gives the client a written notice that identifies the property and states that the dealer proposes to deposit it as security for a loan or advance to the financial services licensee; and

(c)    the amount, or total of the amounts, that the client owes on the day of the deposit is at least the amount of the loan or advance.

7.8.07(9)    
If a financial services licensee deposits property as security for a loan or advance to the financial services licensee, in accordance with subregulation (8) :

(a)    the financial services licensee must, not later than 1 business day after the amount, or total of the amounts, that the client owes on the day of the deposit are repaid, withdraw the property from that deposit; and

(b)    if, at the end of 3 months after the day of that deposit, or at the end of any subsequent interval of 3 months, the property has not been withdrawn from that deposit - the financial services licensee must give the client written notice of that fact.

7.8.07(10)    
In this regulation:

property
includes scrip, but does not include money.