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 7 - Other rules about conduct  

REGULATION 7.8.21   DEALINGS INVOLVING EMPLOYEES OF FINANCIAL SERVICES LICENSEES  

7.8.21(1)   [ Application]  

For subsection 991F(2) of the Act, that subsection does not have effect in relation to:

(a) a bank; or

(b) a body corporate that gives credit in good faith to a person (not being a director of the body corporate) employed by the body corporate, or by another body corporate that is related to the first body corporate, to enable the person to acquire financial products that are:

(i) fully paid shares in the body corporate; and

(ii) to be held in beneficial ownership by the person.

7.8.21(1A)   [ Credit given in good faith]  

For subsection 991F(2) of the Act, that subsection does not have effect in relation to a financial services licensee that gives credit in good faith to a person employed by:

(a) the financial services licensee; or

(b) a person related to the financial services licensee;

to enable the person to acquire an insurance product in relation to a credit facility provided by the financial services licensee to the person.

Example

Mortgage insurance is an insurance product in relation to a credit facility.

7.8.21(2)   [ Circumstances in which related body corporate may act as agent]  

For subsection 991F(3) of the Act, a body corporate that is related to a financial services licensee may act as the agent of an employee of the financial services licensee, in respect of the acquisition mentioned in that subsection, only if:

(a) before the acquisition, the employee has informed the related body corporate that the employee is acquiring, or agreeing to acquire, the financial product on the employee's own behalf; and

(b) the financial services licensee has in place arrangements with the related body corporate to allow the licensee to be informed of, and to gain access to records relating to, the acquisition.

7.8.21(3)   [ Circumstances in which body corporate may act as agent]  

For subsection 991F(3) of the Act, a body corporate may act as the agent of a person who is an employee of a financial services licensee that is a participant in a licensed market and is so employed in connection with a business of dealing in financial products, in respect of an acquisition mentioned in that subsection, if:

(a) the body corporate holds an Australian financial services licence; and

(b) the body corporate is a participant in the same licensed market as the licensee; and

(c) the employer has given consent in writing to the particular acquisition before the acquisition takes place; and

(d) the employee gives the employer a copy of the confirmation of the transaction.

7.8.21(4)   [ Circumstances when employee may acquire product]  

For subsection 991F(3) of the Act, a person who is:

(a) an employee of a financial services licensee that is a participant in a licensed market; and

(b) employed in connection with a business of dealing in financial products;

may, on the person's own behalf, acquire, or agree to acquire, a financial product that is able to be traded on that licensed market, without the licensee's [ sic ] acting as an agent in respect of the transaction, if the person's employment is not directly connected with the licensee's business of dealing in financial products on that licensed market.

7.8.21(5)   [ Provisos]  

Subject to subregulation (6), for subsection 991F(3) of the Act, the subsection does not apply unless:

(a) the particular financial product that is acquired or proposed to be acquired is a financial product traded on a market in which the financial services licensee is not a participant at the time of the acquisition or the proposed acquisition; or

(b) the particular financial product is a derivative the value of which is derived from a financial product mentioned in paragraph (a).

7.8.21(6)   [ Limitation]  

Subregulation (5) does not apply if:

(a) the financial services licensee deals, or has dealt, in a financial product traded on that market:

(i) on the licensee's own behalf (whether directly or through an agent or other representative); or

(ii) on behalf of a client; or

(b) an associate of the financial services licensee is a participant in the market mentioned in that subregulation.