Corporations Amendment (Streamlining Future of Financial Advice) Regulation 2014 (102 of 2014)

Schedule 1  

Corporations Regulations 2001

18   At the end of Subdivision 1 of Division 4 of Part 7.7A

Add:

7.7A.12EB Performance bonuses for individuals

(1) This regulation applies if:

(a) a benefit is an element of an individual’s remuneration for work done by the individual:

(i) as an employee or agent of a licensee; or

(ii) by arrangement with a licensee under the name of the licensee; and

(b) access to the benefit, or the value of the benefit, or both, is partly dependent on the total value or number of financial products of a particular class, or particular classes, that:

(i) the individual recommends to retail clients or a class of retail clients; or

(ii) are acquired by retail clients, or a class of retail clients, to whom the individual has provided financial product advice.

(2) Any part of the benefit that:

(a) relates to financial products covered by paragraph (1)(b); and

(b) would, apart from this regulation, be conflicted remuneration;

is not conflicted remuneration, so long as:

(c) the part, together with any other such part that is an element of the individual’s remuneration, is low in proportion to the individual’s total remuneration; and

(d) in calculating the part, the weighting attributed to the total value or number of financial products covered by paragraph (1)(b) and in relation to which the part would, apart from this regulation, be conflicted remuneration is outweighed or balanced by the weighting attributed to other matters.

(3) This regulation does not limit, and has effect in addition to:

(a) any other regulation made for paragraph 963B(1)(e) of the Act; and

(b) any regulation made for subsection 1528(2) of the Act.

7.7A.12.EC Execution-only services

(1) A monetary benefit given to a financial services licensee who provides financial product advice to persons as retail clients is not conflicted remuneration if:

(a) the benefit is given to the licensee in relation to the issue or sale of a financial product to a person; and

(b) financial product advice in relation to the product, or a class of products of which the product is one, has not been given to the person as a retail client by the licensee, or a representative of the licensee, in the 12 months immediately before the benefit is given.

(2) A monetary benefit given to a representative of a financial services licensee who provides financial product advice to persons as retail clients is not conflicted remuneration if:

(a) the benefit is given to the representative in relation to the issue or sale of a financial product to a person; and

(b) financial product advice in relation to the product, or a class of products of which the product is one, has not been given to the person as a retail client by the representative in the 12 months immediately before the benefit is given.