Corporations Act 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .

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

Division 4A - Special provisions relating to margin lending facilities  

Subdivision A - Responsible lending conduct for margin lending facilities  

SECTION 985G   REASONABLE INQUIRIES ETC. ABOUT THE RETAIL CLIENT  

Requirement to make inquiries and take steps to verify

985G(1)    
For the purposes of paragraph 985E(1)(d) , the provider must, before making the assessment:

(a)    make reasonable inquiries about the retail client ' s financial situation; and

(b)    take reasonable steps to verify the retail client ' s financial situation; and

(c)    make any inquiries prescribed by the regulations about any matter prescribed by the regulations; and

(d)    take any steps prescribed by the regulations to verify any matter prescribed by the regulations.

985G(2)    
The regulations may prescribe particular inquiries or steps that must be made or taken, or do not need to be made or taken, for the purposes of paragraph (1)(a) or (b).

When not required to take steps to verify

985G(3)    
Despite subsection (1), if:

(a)    a financial services licensee that is authorised to provide financial product advice in relation to margin lending facilities has prepared a statement of advice for the retail client; and

(b)    the statement of advice was prepared no more than 90 days before the critical day; and

(c)    the statement of advice recommends that:

(i) the retail client acquire the particular margin lending facility; or

(ii) the limit of the particular margin lending facility be increased; and

(d)    the limit of the facility, or the increase in the limit of the facility, is not greater than the limit, or the increase in the limit, recommended in the statement of advice; and

(e)    the statement of advice includes the information that was used for the purposes of preparing the statement of advice;

then the provider is not required, for the purposes of paragraph (1)(b) or (d), to verify that information.