Corporations Regulations 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

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

Division 2 - Dealing with clients ' money  

Subdivision A - Money other than loans  

REGULATION 7.8.03   HOW MONEY TO BE DEALT WITH IF LICENSEE CEASES TO BE LICENSED ETC  

7.8.03(1)   [ Application]  

For paragraph 981F (a) of the Act, this regulation applies if a financial services licensee ceases to be licensed (including a cessation because the financial services licensee's licence has been suspended or cancelled).

7.8.03(2)   [ Application]  

For paragraph 981F (b) of the Act, this regulation applies if a financial services licensee:

(a) becomes insolvent under an administration; or

(b) is the subject of any of the following arrangements:

(i) the appointment of an administrator under section 436A , 436B or 436C of the Act;

(ii) the commencement of winding up;

(iii) the appointment of a receiver of property of the financial services licensee, whether by a court or otherwise;

(iv) the appointment of a receiver and manager of property of the financial services licensee, whether by a court or otherwise;

(v) entry into a compromise or arrangement with creditors of the financial services licensee, or a class of creditors;

(vi) if the financial services licensee is deceased - administration of the estate of the financial services licensee under Part XI of the Bankruptcy Act 1966 ;

(vii) if the financial services licensee is deceased - administration of the estate of the financial services licensee under the law of an external Territory that provides for the administration of the insolvent estate of a deceased person;

(viii) an arrangement under the law of a foreign country that provides for a matter mentioned in subparagraphs (i) to (vii).

7.8.03(3)   [ Application]  

For paragraph 981F (d) of the Act, this regulation applies if:

(a) a financial services licensee ceases to carry on a particular activity authorised by the financial services licence; and

(b) money is paid in connection with that activity.

7.8.03(4)   [ Account subject to trust]  

For each person who is entitled to be paid money from an account of the financial services licensee maintained for section 981B of the Act, the account is taken to be subject to a trust in favour of the person.

7.8.03(5)   [ Investment subject to trust]  

If money in an account of the financial services licensee maintained for section 981B of the Act has been invested, for each person who is entitled to be paid money from the account, the investment is taken to be subject to a trust in favour of the person.

7.8.03(6)   [ Priorities]  

Money in the account of the financial services licensee maintained for section 981B of the Act is to be paid as follows:

(a) the first payment is of money that has been paid into the account in error;

(b) if money has been received on behalf of insureds in accordance with a contract of insurance, the second payment is payment to each insured person who is entitled to be paid money from the account, in the following order:

(i) the amounts that the insured persons are entitled to receive from the moneys in the account in respect of claims that have been made;

(ii) the amounts that the insured persons are entitled to receive from the moneys in the account in respect of other matters;

(c) if:

(i) paragraph (b) has been complied with; or

(ii) paragraph (b) does not apply;

the next payment is payment to each person who is entitled to be paid money from the account;

(d) if the money in the account is not sufficient to be paid in accordance with paragraph (a), (b) or (c), the money in the account must be paid in proportion to the amount of each person's entitlement;

(e) if there is money remaining in the account after payments made in accordance with paragraphs (a), (b) and (c), the remaining money is taken to be money payable to the financial services licensee.

7.8.03(7)   [ Paramountcy]  

This regulation applies despite anything to the contrary in the Bankruptcy Act 1966 or a law relating to companies.