Taxation Laws Amendment Act (No. 5) 2003 (142 of 2003)

Schedule 1   Thin Capitalisation: amendments taking effect on 1 July 2001

Part 6   Definition of financial entity

Income Tax Assessment Act 1997

29   Subsection 995-1(1) (paragraph (c) of the definition of financial entity )

Repeal the paragraph, substitute:

(c) an entity that:

(i) is a financial services licensee within the meaning of the Corporations Act 2001 whose licence covers dealings in at least one of the financial products mentioned in paragraphs 764A(1)(a), (b) and (j) of that Act; or

(ii) under paragraph 911A(2)(h) or (l) of the Corporations Act 2001, is exempt from the requirement to hold an Australian financial services licence for dealings in at least one of those financial products;

and carries on a *business of dealing in securities, but not predominantly for the purposes of dealing in securities with, or on behalf of, the entity's *associates;

Note 1: Paragraphs 764A(1)(a), (b) and (j) of the Corporations Act 2001 deal respectively with securities, managed investment products and government debentures, stocks and bonds.

Note 2: Paragraph 911A(2)(h) of that Act exempts financial services provided to wholesale clients in the course of a business that is regulated by an overseas regulatory authority approved by the Australian Securities and Investments Commission (ASIC).

Note 3: Paragraph 911A(2)(l) of that Act empowers ASIC to exempt financial services.

(d) an entity that:

(i) is a financial services licensee within the meaning of the Corporations Act 2001 whose licence covers dealings in derivatives within the meaning of that Act; or

(ii) under paragraph 911A(2)(h) or (l) of the Corporations Act 2001, is exempt from the requirement to hold an Australian financial services licence for dealings in such derivatives;

and carries on a business of dealing in such derivatives, but not predominantly for the purposes of dealing in such derivatives with, or on behalf of, the entity's associates.