Corporations Amendment Regulation 2013 (No. 4)

(115 of 2013)

17 June 2013

Corporations Act 2001

1   Name of regulation

This regulation is the Corporations Amendment Regulation 2013 (No. 4).

2   Commencement

This regulation commences on the day after it is registered.

3   Authority

This regulation is made under the Corporations Act 2001.

4   Schedule(s)

Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.

Schedule 1   Amendments

Corporations Regulations 2001

1   Regulation 7.7A.12D (heading)

Omit “ given to representatives ”.

2   After subregulation 7.7A.12D(1)

Insert:

(1A) A monetary benefit is not conflicted remuneration if:

(a) the benefit is a fee paid between a financial services licensee that is a trading participant of a prescribed financial market and a financial services licensee that is not a trading participant in respect of dealings undertaken by a retail client through a specified service; and

(b) each of those trades is executed by the trading participant on behalf of the retail client; and

(c) the fee is a percentage, not exceeding 100%, of a brokerage fee paid directly or indirectly by the retail client; and

(d) no portion of the benefit is paid to a person other than the trading participant or the licensee that is not a trading participant.

3   Subregulation 7.7A.12D(2) (at the end of the definition of brokerage fee)

Add:

Note: Subregulations 7.7A.17 and 7.7A.18 relate to exemptions in relation to the charging of asset-based fees on borrowed amounts.

4   Subregulation 7.7A.12D(2)

Insert:

specified service means a service which:

(a) is provided for retail clients under the name or brand name of:

(i) the financial services licensee that is not a trading participant; or

(ii) the trading participant and the financial services licensee that is not a trading participant; and

(b) relates to the dealing, on behalf of the retail client, in a financial product traded on:

(i) a prescribed financial market; or

(ii) a prescribed foreign financial market; and

(c) is provided in either or both of the following ways:

(i) by direct electronic access;

(ii) by telephone, but only if:

(A) direct electronic access is not available for a temporary period, or the retail client expresses a preference that the service be provided by telephone; and

(B) neither the trading participant nor the financial services licensee that is not a trading participant is to provide financial product advice to the retail client by telephone in relation to the dealing undertaken on the retail client’s behalf; and

(d) is provided in circumstances in which neither the trading participant nor the financial services licensee that is not a trading participant provides personal advice to the retail client in relation to the dealing undertaken on the retail client’s behalf.

5   At the end of Division 4 of Part 7.7A

Add:

Subdivision 3 - Asset-based fees on borrowed amounts

7.7A.17 Financial services licensees

For subsection 964D(4) of the Act, a circumstance in which subsections 964D(1) and (2) of the Act do not apply is that the asset-based fee being charged is a brokerage fee within the meaning of regulation 7.7A.12D.

7.7A.18 Authorised representatives

For subsection 964E(3) of the Act, a circumstance in which subsection 964E(1) of the Act does not apply is that the asset-based fee being charged is a brokerage fee within the meaning of regulation 7.7A.12D.