Sch 5 repealed by SLI No 113 of 2004, reg 3 and Sch 2 item 12, effective 1 July 2006. Sch 5 formerly read:

SCHEDULE 5

(subregulation 3.03(2), definition of net tangible assets )

NET TANGIBLE ASSETS

1 Net tangible assets  
1
For subsection 26(7) of the Act:

net tangible assets
means the total tangible assets of an applicant, less any adjusted liabilities.

2 Adjusted liabilities  
2(1)
For the definition of net tangible assets in clause 1:

adjusted liabilities
means total liabilities plus:

(a) subject to subclause (2), amounts owing from, or invested in, any person who:

(i) is an associate of the applicant; or

(ii) was an associate of the applicant at the time the liability was incurred or the investment was made; or

(iii) became liable to the applicant because of, or in connection with, the acquisition of interests in a managed investment scheme operated by the applicant; and

(b) subject to subclauses (2) and (3), amounts owing from, or invested in:

(i) any trust, managed investment scheme or prescribed interest undertaking; or

(ii) any regulated superannuation fund, approved deposit fund, pooled superannuation trust or public sector superannuation scheme ( superannuation scheme );

in respect of which the applicant or an associate of the applicant may exercise any form of power or control; and

minus:

(c) the value of any subordinated debt approved by APRA; and

(d) the value of any ADI undertakings, except to the extent that the payment of any amount under the undertaking gives rise to an obligation, actual or contingent, on the part of the applicant to pay any part of that amount to any person or an obligation of any other person to pay money secured over property of the applicant.

Note

Under Part 2 of the Act, APRA may approve a trustee, subject to conditions. An approval of subordinated debt mentioned in paragraph (c) would occur under the approval process in Part 2 of the Act.

2(2)
The amounts referred to in paragraphs (1)(a) and (b) are not to be treated as adjustments to total liabilities to the extent that those amounts are:

(a) adequately secured; or

(b) owing from an Australian ADI or owing from a disclosing entity (other than a registered scheme of which the applicant or an associate of the applicant is the responsible entity) that has net tangible assets of:

(i) more than $50,000,000; or

(ii) at least 4 times the amount owing;

whichever is the greater as shown in the most recent accounts of the entity lodged with APRA; or

(c) owing by way of fees from, or under rights of reimbursement for expenditure by the applicant out of property of, a superannuation scheme, an Investor Directed Portfolio Services, a registered scheme or a prescribed interest undertaking to which an approved deed relates (the Scheme ) provided that that amount:

(i) exceeds amounts:

(A) invested by the Scheme in; or

(B) lent directly or indirectly by the Scheme to the applicant or a group entity (other than loans that are deposits with an Australian ADI in the ordinary course of its banking business); and

(ii) if owing by way of fees, represents no more than fees owing for the last 3 months; and

(iii) if owing under rights of reimbursement for expenditure by the applicant, has not been owing for more than 3 months.

2(3)
The amounts referred in paragraph (1)(b) are not to be treated as adjustments to total liabilities to the extent that those amounts are invested in:

(a) a registered scheme; or

(b) a prescribed interest undertaking to which an approved deed relates;

unless any part of the amount invested is, in substance, directly or indirectly, invested in the applicant.

2(4)
For paragraphs (1)(a) and (b) and (2)(b):

associate
has the meaning set out in Division 2 of Part 1.2 of the Corporations Act 2001 , and includes the meaning set out in sections 13 and 15 of that Act.

2(5)
For paragraph (1)(d):

ADI undertakings
means the amount of a financial commitment provided by an Australian ADI, in the form of an undertaking to pay the amount of the financial commitment to the applicant, that:

(a) is enforceable and unqualified; and

(b) is to pay on written demand by the applicant, except to the extent that payment has previously been made by the ADI to the applicant under the undertaking; and

(c) remains operative (even if, for example the applicant ceases to hold a securities dealer's licence or ceases to be a responsible entity of registered schemes), until:

(i) APRA has consented in writing to the cancellation of the undertaking; or

(ii) the undertaking is discharged by payment to the applicant of the maximum amount payable under the undertaking (either upon request of the applicant or at the ADIs initiative).

2(6)
For paragraph (2)(a), an amount is adequately secured if it is secured by:

(a) an enforceable charge over securities, promissory notes or bills of exchange (other than securities, promissory notes or bills of exchange of the applicant or any group entity) for which there exists an active market and the market value of these securities, promissory notes or bills of exchange always equals not less than 105% of the particular amount owing; or

(b) a registered first mortgage over real estate that has a fair market valuation at least equal to the amount owing.

2(7)
For paragraph (6)(a):

group entity
means any entity which controls the applicant or any entity controlled by any entity which controls the applicant.

2(8)
For paragraph (6)(a), an active market is taken to exist for:

(a) securities, promissory notes or bills of exchange traded in a recognised market in which independent, bona fide offers to buy and sell are regularly made so that a price reasonably related to the last sale price or current bona fide competitive bid and offer quotations can be determined promptly and where payment will be received within the customary period; and

(b) any security which APRA has approved in writing for the purposes of this definition.
3 Calculation of value of net tangible assets  
3
For section 26 of the Act, the value of the net tangible assets of an applicant must be calculated on the basis of assets and liabilities as they would appear if, at the time of calculation, a balance sheet were made up for lodgement as part of a financial report under Chapter 2M of the Corporations Act 2001 on the basis that the applicant is a reporting entity.

Sch 5 inserted by SR No 113 of 2004, reg 3 and Sch 1 item 21, effective 1 July 2004.